MILAN -- Sogefi will leverage PSA Group's acquisition of Opel to improve its market share in Europe in the diesel filtration business, the Italian's supplier's CEO, Laurent Hebenstreit, said.
Opel will shift its entire model lineup onto PSA's architecture, rolling out nine new models by 2020 and completing the transition to PSA technology four years later, the German automaker said last month.
This means Opel cars will gradually switch to using PSA engines equipped with Sogefi manifolds and filters, Hebenstreit said in an interview.
While the Opel acquisition is good news for Sogefi, slumping demand for diesel cars in Europe is a headwind.
Sogefi forecasts diesel vehicle market share in Europe will plunge to 32 percent in 2022 and to 25 percent or as low as 20 percent in 2027 from an estimated 41 percent this year.
Hebenstreit said the diesel decline will be a challenge but he sees opportunities in the growth of electric and hybrid sales.
He expects higher sales of the company's interior air filters for EVs and hybrids because buyers of such vehicles are "more demanding" in terms of air quality.
Sogefi is the global No. 2 supplier of air intake manifolds, which is a growth area because automakers need them as the use of turbochargers grows in gasoline engines to increase power, allowing engines to be downsized for lower CO2 emissions. Using a turbocharger increases the need to cool the air intake and air intake manifolds will grow in price and complexity, Hebenstreit said.
Sogefi is also developing new cooling systems for 48-volt mild-hybrids, which require increased cooling functions because of the power electronics needed to manage battery recharging.
"This is a very interesting growth area for us," Hebenstreit said.
All these business opportunities should help Sogefi to compensate for the diesel decline and post profitable growth, he said.
Hebenstreit does not foresee Sogefi venturing into new product lines in the automotive business, at least not in the short to medium term. Longer term, however, the company’s competences in filtration will enable the supplier to expand into the global filtration market, which is estimated at 40 billion euros.
Sogefi had revenues of 1.6 billion euros in 2016 with three main businesses: suspensions, filtration, air and cooling. Each had sales of around 500 million euros. The company's main competitors are Germany's Mubea in suspensions, Mann+Hummel in filtration and Mahle in air and cooling.
Asked if a midsize company such as Sogefi will be able to remain independent and compete successfully with such giants as Mahle, Hebenstreit replied that Sogefi doubled capital expenditure to 70 million euros in 2017 from 36 million in 2013 and plans to increase it again in 2018.
Regarding competitors’ strength, he said: "You have to look at each specific business. In manifolds, for example, Mahle's share is just a couple of percentage points ahead of us."