European Medium-Heavy Duty Natural Gas Truck and Bus Market

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Brief summary of key takeaways from Frost & Sullivan's research aimed at Western European medium-heavy duty natural gas truck and bus markets

Transcript of European Medium-Heavy Duty Natural Gas Truck and Bus Market

  • 1. Strategic Analysis of the Medium- to Heavy-duty Natural Gas Commercial Vehicle Market in Europe Compression Ignition LNG Technology Poised to Deliver Highest Volume ContributionBrief Summary Few Slides from Complete Study on This Topic M8D2-18 January 2013

2. Research TeamLead AnalystContributing AnalystSaideep SudhakarWallace Lau Research Analyst, Automotive & Transportation +1.416.490.0813Consulting Analyst Automotive and Transportation91.44.6681.4125 saideeps@frost.comWallace.lau@frost.comResearch DirectorStrategic Review Committee LeaderSandeep KarFranck Leveque Vice President, Automotive & TransportationResearch Director, Commercial Vehicles Automotive and Transportation 1.416.490.7796+49 (0) 697703321sandeep.kar@frost.comFranck.leveque@frost.comM8D2-182 3. Contents SectionSlide NumbersExecutive Summary4Research Objective, Scope, Methodology, and Background16Definitions/Segmentation22Market Overview26Mega Trends and Industry Convergence Implications41Total Market- External Challenges: Drivers and Restraints43 Forecasts and Trends52 Component Pricing and Revenue Forecasts67 Market Share and Competitive Analysis79Truck OEM Profiles89Bus OEM Profiles97Supplier Profile106Conclusions and Future Outlook114Appendix120M8D2-183 4. Executive SummaryM8D2-184 5. Executive SummaryKey Findings1Natural gas truck and bus penetration is expected to reach 3.4% and 12.7% respectively by 2018.2Compression Ignition (CI) engines powered by high pressure direct injection (HPDI) and dual fuel technology will provide the necessary impetus for the natural gas (NG) commercial vehicle(CV) market.3Liquefied natural gas (LNG) technology is expected to dominate the NG truck market owing to the infrastructure support provided by projects such as the blue corridor project across freight corridors in Europe.4Shift from oil linked to spot pricing of natural gas will reduce the price of natural gas and drive the natural gas vehicle adoption5NG component revenue market is expected to reach 446.1 million by 2018. LNG and compressed natural gas (CNG) tanks are set to emerge as top revenue generator in the components market. Source: Frost & SullivanM8D2-185 6. Executive SummaryMarket Engineering Measurements MD and HD Natural Gas CV Market: Europe, 2011 Market Overview Component Market RevenuesMarket StageNascent71.6 M31% (CAGR)446.1 M2,750(2011)Compound Annual Growth RateComponent Market Size at End of Forecast PeriodMarket Units/Volume(2011)Price Sensitivity(2018)Number of Competitors 90%100%Source: Clean Air Power, Frost & SullivanM8D2-1815 16. Executive SummaryKey Conclusions and Future Outlook ParametersMarket StatusCompetitionTechnologyBarriers to enter European MarketCurrent The potential size of the market is vast and not fully penetrated (only 950 trucks in a total market size of approximately 384 thousand trucks). Top 4 OEMs control more than 90 per cent of the truck NG market (Daimler, Volvo, Scania and IVECO).Future Market to experience strong growth driven by fuelling infrastructure development across the continent coupled with tightening emission regulations. Total NG unit shipments to reach 18,200 units by 2018. Competition is expected to intensify across the forecast period with new participants entering the market. 90% of the natural gas market is controlled by five There will be partnerships with NG engine major OEMs (MAN, Daimler, Scania, Volvo, and developers. IVECO) in buses. There are dedicated SI engines which run on High power dedicated CI engines and dual CNG for short haul and refuse applications and power engines will play a major role. LNG for long haulage and distribution application. Natural gas price is oil linked and there are a few government incentives promoting the use of natural gas as a fuel Co-ordinated EU policy, similar to the NATGAS Act, and availability of cheap natural gas from America will promote the advocacy of natural gas. Source: Frost & SullivanM8D2-1816 17. The Last WordThree Big Predictions1By 2018, 3.8% of all medium- and heavy-duty commercial vehicles manufactured in Western Europe will feature natural gas powertrains. The installation rate in the medium- and heavy-duty truck market will reach 3.4%, while medium- and heavyduty buses will reach 12.7%.2A 8.3/MMBtu price level for natural gas in Europe is expected in 2018 by Frost & Sullivan. Given current pricing levels and forecasted prices; and LNG and CNG offering 0.4/DGE cost advantage over diesel fastest payback is expected for LNG in long-haul trucking and CNG in short-haul bus routes.3By 2018, 90% of all natural gas powered buses manufactured in that year will feature spark ignited technology, while 80% of CNG trucks will feature spark ignition and 60% of LNG trucks will feature compression ignition technology.Source: Frost & SullivanM8D2-1817 18. Legal DisclaimerFrost & Sullivan takes no responsibility for any incorrect information supplied to us by manufacturers or users. Quantitative market information is based primarily on interviews and therefore is subject to fluctuation. Frost & Sullivan research services are limitedpublications containing valuable market information provided to a select group of customers. Our customers acknowledge, when ordering or downloading, that Frost & Sullivan Research Services are for customers internal use and not for general publication or disclosure to third parties. No part of this Research Service may be given, lent, resold or disclosed tononcustomers without written permission. Furthermore, no part may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the permission of the publisher.For information regarding permission, write to: Frost & Sullivan 331 E. Evelyn Ave. Suite 100 Mountain View, CA 94041M8D2-1818 19. Market Engineering MethodologyOne of Frost & Sullivans core deliverables is its Market Engineering studies. They are based our proprietary Market Engineering Methodology. This approach, developed across the 50 years of experience assessing global markets, applies engineering rigor to the often nebulous art of market forecasting and interpretation. A detailed description of the methodology can be found here.Source: Frost & SullivanM8D2-1819