|If you regularly visit automotive trade shows (and IMS Research regularly does), one thing is clear: efforts to make vehicles that are less harmful to the environment are being heavily promoted by manufacturers. Complex looking systems that enable better fuel efficiency and reduced emissions are often proudly displayed next to the glitzy new cars; exhibitor displays feature green slogans; executives stress their commitment to making greener products at every car launch. However, it isn’t just car manufacturers that hope to profit from greener cars. Suppliers of the technologies that enable cars to be greener are set to reap big rewards. |
A new report from IMS Research entitled “The Green Car” analyses demand for a range of technologies aimed at reducing fuel consumption and engine emissions. It finds that in the next ten years, technologies that are likely to be increasingly used include cylinder deactivation, variable valve timing, diesel engines, turbochargers, piezo diesel injection, gasoline direct injection, hybrid engines, stop-start systems and flex-fuel engines. Suppliers of these systems are already making lots of money. They are likely to make even more in future.
Bosch is one such supplier. It claimed that environmentally friendly technologies played a significant part in increased automotive profits this year. It supplies many of the technologies above; gasoline direct injection systems provide a good example. It sold over 900,000 of them in 2007; it expects to sell over 2 million in 2010.
But will the lure of increasing demand for such technologies tempt other companies to enter the market and drive prices down? According to report author, Jon Cropley, “Entering this market is not that easy. Existing suppliers have invested vast amounts of money and engineering time in refining their systems. They have established a reputation for quality and have become trusted by their customers. It would probably take a long time and substantial resources for suppliers considering entering the market to achieve significant share”.
Incumbent suppliers of environmentally friendly automotive technologies may therefore posses a rare gift – to make money in the car industry.