Automotive News - February 4, 2008 - (Page 1) FEBRUARY 4, 2008 • 1 82nd year — No. 6293 Bosch: ’07 sales rose 4.5% STUTTGART — Germany’s Bosch Group said its automotive parts business performed better than expected last year, despite cost pressures and a weakening U.S. market. Preliminary 2007 results released Friday show total sales at Robert Bosch GmbH increasing 4.5 percent to $42.3 billion (28.5 billion euros). The final results will be released at the company’s annual press conference in May. Suppliers race for fuel savings Robert Sherefkin rsherefkin@crain.com MARK EVANS /ISTOCKPHOTO CAFE winners Stiffer fuel economy rules have changed the technology competition among automotive suppliers. Here are some winning technologies and the companies that provide them. Nissan’s 2007 sales rise TOKYO — Nissan Motor Co. says the subprime mortgage crisis will help shrink U.S. light-vehicle sales to as low as 15.5 million units in 2008. Nissan is setting aside cash to cover late payments and loan losses at its retail financing unit. The number of problem loans is small, but those loans are pushing costs higher, Vice President Joji Tagawa said. In 2007, U.S. lightvehicle sales totaled 16.2 million. Nissan sold 255,000 vehicles in the United States in the OctoberDecember quarter, up 3.7 percent from the same period of 2006. For the third quarter ending Dec. 31, Nissan’s global operating profit rose 16 percent to ¥212 billion ($1.88 billion at then-current exchange rates). Sales climbed 18 percent to ¥2.77 trillion ($24.5 billion). — Hans Greimel DETROIT — It’s a new world for automotive suppliers. Parts that boost fuel economy are in. Those that gulp gasoline — even if they improve performance — are out. So turbochargers are in, but superchargers are out. When it comes to technology, it can be tough to pick winners. But here’s a look at the early leaders in key categories as the industry enters the age of stiffer fuel economy rules. Turbocharger What it does: Improves fuel economy for diesel and gasoline engines, with no loss of performance Who offers it: BorgWarner, Honeywell Gasoline direct injection What it does: Saves fuel, reduces emissions Who offers it: Bosch, Denso, Continental Lightweight material — aluminum What it does: Less weight means less filling of the fuel tank Who offers it: Alcoa, Novelis, Alcan Aluminum Lightweight material — steel What it does: Less weight means less filling of the fuel tank Who offers it: United States Steel, AK Steel Holding, ArcelorMittal Lithium ion battery What it does: Makes plug-in hybrids viable Who plans to offer it: Johnson Controls, Saft, Yuasa Batteries, Sanyo Electric, others Turbochargers BorgWarner Inc. is riding high. Its products please automakers by raising fuel economy without sacrificing engine performance. During the 1990s, BorgWarner responded quickly to European automakers’ demand for turbochargers for small diesel engines. Today, BorgWarner owns 33 percent of the global turbo market. BorgWarner and Honeywell International Inc. — maker of Garrett turbochargers — will prosper as U.S. diesel sales rise, says Rob Hinchliffe, an analyst with UBS Investment Research. He forecasts U.S. sales of 1.5 million diesel engines by 2012, up from 500,000 in 2006. Turbos are available for almost all diesel engines. And they can make a gasoline-sipping four-cylinder engine perform like a V-6. BorgWarner and other companies have been improving their turbos. Last year, BorgWarner won an Automotive News PACE Award for its gasoline turbocharger with variable turbine geometry, and it’s a PACE finalist this year with another turbocharger. PACE stands for Premier Automotive suppliers’ Contribution to Excellence. In addition, Cummins Inc., of Columbus, Ind., is a 2008 PACE finalist with its 6.7-liter turbodiesel engine. Now, other suppliers want to cash in. Robert Bosch GmbH has formed a partnership with Mahle GmbH to produce turbochargers. The big players are Bosch, Denso Corp. and Continental AG, which recently acquired this line with its purchase of the former Siemens VDO Automotive Corp. Continental is marketing a piezo direct injection system that is a 2008 PACE finalist. Winners here are United States Steel Corp., AK Steel Holding Corp. and ArcelorMittal Inc. Lithium ion batteries Johnson Controls Inc. appears to be a winner in the race to produce a commercial lithium ion battery. Soon it will start shipping lithium ion batteries to Europe for the Mercedes S-class hybrid. Johnson Controls’ technology is worth “several thousand dollars per vehicle,” says David Leiker, an analyst with Robert W. Baird & Co. in Milwaukee. But Johnson Controls will have to split its revenues with its manufacturing-expertise partner, France’s Saft SA. Asian rivals in the race for viable lithium ion batteries include Automotive Energy Supply Corp., a venture formed by Nissan Motor Co. and NEC Corp.; Panasonic EV Energy, a venture between Toyota Motor Corp. and Matsushita Electric Industrial Corp.; Yuasa Batteries Inc. and Sanyo Electric Co. c Lightweight materials Cutting weight from vehicles is a quick way to save fuel. Aluminum content grew to an average of 327 pounds per light vehicle in North America last year, up from 317 pounds in 2006. New fuel-efficiency rules will push aluminum usage higher, says Dick Schultz, a materials specialist with Ducker Worldwide LLC, of suburban Detroit. Automakers will use more aluminum hoods and rear decks. Key suppliers include Alcoa Inc., Novelis Inc. and Alcan Aluminum Ltd. Steelmakers are replacing lowerand medium-strength steels with thinner high-strength steels. They cost more but save weight. Engine controls Gasoline direct injection — a process that sprays fuel directly into the combustion chamber instead of into a port in the cylinder head — is a winning technology. Gasoline direct injection is available on the Cadillac CTS V-6, Pontiac Solstice GXP and other vehicles. The technology improves performance while saving fuel and reducing emissions. Gasoline direct injection is coming into favor now because of lowered sulfur content in U.S. gasoline. Extra sulfur creates noxious emissions. American Axle to expand DETROIT — American Axle and Manufacturing Holdings Inc. said it will open three manufacturing plants in Asia by the 2010 model year. In a conference call Friday with analysts and reporters, American Axle CEO Richard E. Dauch laid out plans to build a plant in Thailand to supply General Motors and two plants in India to supply Tata Motors and Mahindra International Ltd. Dauch said Rayong, Thailand, will be the site of a regional manufacturing plant to supply GM by the 2010 model year. Dauch also said American Axle will open a wholly owned manufacturing plant in southwestern India in 2009 to supply commercial axles to Mahindra. A plant in northern India is scheduled to begin operations this year to supply Tata with rear-drive axles. American Axle said it posted net sales of $3.25 billion in 2007, up 1.78 percent from 2006. American Axle had net income of $37.0 million in 2007 compared with a net loss of $222.5 million in 2006. — Ryan Beene Modern turbos leave early versions in the dust Richard Truett rtruett@crain.com Automakers are flirting with turbochargers again, just as they have every decade since the 1960s. Both General Motors and Ford Motor Co. recently have revealed plans to install turbochargers in mass-market cars. But the new generation of turbos won’t be like the one in your father’s 1962 Oldsmobile Jetfire. The turbocharger no longer is intended to help enthusiastic drivers burn rubber or aid heavy-duty pickups that need lots of torque. Instead, it’s a fuelsaving device that lets automakers use smaller engines. For example, the Lincoln MKS will be powered by a twin-turbocharged 3.5-liter V-6 that delivers the same performance as a 4.6-liter V-8. The impellers in today’s turbochargers spin most of the time the engine is running. That’s one reason why turbo lag has disappeared. Drivers of turbocharged cars today feel a smooth rush of power. Improved performance and reliability comes courtesy of the European market, where turbodiesels are popular. Stronger, smoother Two parts of the turbocharger — the bearings on the impeller shaft and the flow of gases to the impeller itself — have received major upgrades. Better bearings don’t overheat. So impellers can spool up more quickly, reducing turbo lag. Acceleration is smoother and more predictable because of variable nozzle technology that adjusts the flow of exhaust gas to the impeller based on engine speed and load. Suppliers such as Honeywell and BorgWarner, the leading manufacturers of turbochargers, have improved reliability so much that the device now is as trouble-free as anything else under the hood. “We consider it to be a nonserviceable item good for the life of the vehicle,” says Tom Grissom, director of business development for BorgWarner’s turbo and emissions systems. The bottom line: Turbochargers are ready for mainstream use on gasoline engines in North America. c Yesterday’s turbochargers were unreliable. Today’s are as trouble-free as the rest of the engine. news ANALYSIS How it works A turbocharger is an air pump mounted in the exhaust system. It uses exhaust gases to spin an impeller at high speeds. The impeller looks a bit like the fan blades in a jet engine. It forces air through the intake manifold into each of the engine’s cylinders. That enables the engine to develop a lot more power. For most of the past 40 years, turbochargers were used sparingly in North America. GM, Ford, Chrysler, Saab, Porsche and others sold a few thousand turbocharged cars a year. CORRECTION A Page 1 story in the Jan. 28 issue omitted the first name of Debbie Dingell, General Motors’ executive director of public affairs. But turbochargers never enjoyed big sales because they were unrefined and unreliable. A turbo could seize up if it overheated — and it often did. And if the air cleaner wasn’t changed frequently, the impeller blades could be d
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