Demand will rise with higher fuel economy standards and consumer spending power.
New York, NY (PRWEB) October 27, 2014
This industry manufactures turbochargers for use in the engines of cars, trucks, aircraft and other vehicles. Turbochargers are turbine-driven induction devices that increase an engine's efficiency by forcing extra air into the combustion engine; by increasing the engine's efficiency, turbochargers economize on fuel and reduce carbon dioxide emissions. “Therefore, demand for turbochargers grows with increased automotive production as well as increased fuel efficiency regulation,” according to IBISWorld Industry Analyst Amal Ahmad. Both factors have contributed to significant industry growth in the five years to 2014, at an estimated 3.3% per year on average. This includes forecast growth of 9.1% over 2014, bringing total revenue to $1.3 billion.
Revenue for the Turbocharger Manufacturing industry has grown rapidly from a low base. Currently, only a fraction of light vehicles in the United States are equipped with turbochargers; this is due to environmental regulation only recently catching up to the issue of fuel efficiency in light vehicles. “As a result, the United States is an emerging market for turbochargers while the domestic industry is small, characterized by a handful of operators and high concentration,” says Ahmad. BorgWarner and Cummins, both US-based global auto components manufacturers, are the largest industry players, together generating more than 75.0% of annual industry revenue. In addition, industry operators generate a significant share of revenue from exports to other countries. In particular, operators export heavily to Mexico, where several OEMs and other buyers of turbochargers have relocated to take advantage of low wage costs.
Over the five years to 2019, fuel-efficiency regulations are expected to propel the use of turbochargers in close to half of all light vehicles. Rising oil prices will also continue to encourage increasing fuel efficiency in engines. As a result, IBISWorld expects industry growth to accelerate greatly. New companies are likely to enter the industry to take advantage of growing demand; Tokyo-based Mitsubishi has already announced plans to open a turbocharger manufacturing plant in Indiana in late 2014 to capitalize on this demand. Nonetheless, the industry is likely to remain concentrated between these top global auto component manufacturers, and profit margins are likely to remain high.
For more information, visit IBISWorld’s Turbocharger Manufacturing in the US industry report page.
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IBISWorld industry Report Key Topics
This industry manufactures turbochargers. Turbochargers are centrifugal compressors powered by the exhaust-gas turbine in an engine and are predominantly used in automobiles to enhance engine performance. Turbochargers can also enhance the performance of engines in aircraft, motorsport vehicles and commercial boats. The production of superchargers, which are similar to turbochargers but derive their forced induction from mechanical power, is excluded from industry operations.
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