Languages
Pages
Legal
Strategic Analysis of the Medium- to Heavy-duty Natural
Gas Commercial Vehicle Market in Europe Compression Ignition LNG Technology Poised to Deliver Highest Volume Contribution
M8D2-18
January 2013
Brief Summary
Few Slides from
Complete Study on This
Topic
2 M8D2-18
Research Team
Wallace Lau
Research Analyst, Automotive &
Transportation
+1.416.490.0813
Saideep Sudhakar Consulting Analyst
Automotive and Transportation
91.44.6681.4125
Lead Analyst Contributing Analyst
Research Director
Sandeep Kar Research Director, Commercial Vehicles
Automotive and Transportation
1.416.490.7796
Strategic Review Committee Leader
Franck Leveque
Vice President, Automotive &
Transportation
+49 (0) 697703321
3 M8D2-18
Contents
Section Slide Numbers
Executive Summary 4
Research Objective, Scope, Methodology, and Background 16
Definitions/Segmentation 22
Market Overview 26
Mega Trends and Industry Convergence Implications 41
Total Market -
• External Challenges: Drivers and Restraints 43
• Forecasts and Trends 52
• Component Pricing and Revenue Forecasts 67
• Market Share and Competitive Analysis 79
Truck OEM Profiles 89
Bus OEM Profiles 97
Supplier Profile 106
Conclusions and Future Outlook 114
Appendix 120
4 M8D2-18
Executive Summary
5 M8D2-18
Executive Summary—Key Findings
Source: Frost & Sullivan
Natural gas truck and bus penetration is expected to reach 3.4% and 12.7% respectively by 2018. 1
Compression 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.
2
Liquefied 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.
3
Shift from oil linked to spot pricing of natural gas will reduce the price of natural gas and drive the
natural gas vehicle adoption 4
NG 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. 5
6 M8D2-18
Executive Summary—Market Engineering Measurements
Market Stage
Nascent
Component
Market
Revenues
€71.6 M
(2011)
Market
Units/Volume
2,750
(2011)
Component Market
Size at End of
Forecast Period
€446.1 M
(2018)
Price Sensitivity
8
Compound
Annual Growth
Rate
31%
(CAGR)
MD and HD Natural Gas CV Market: Europe, 2011
Market Overview
Stable Increasing Decreasing Note: All figures are rounded. The base year is 2011. Source: Frost & Sullivan
Number of
Competitors
<10
(active market competitors in
base year)
(Scale of 1 to 10, Low to
High)
For a tabular version click here.
7 M8D2-18
High
Executive Summary—Strategic Fact Sheet Natural gas penetration in the European MD and HD natural gas CV market will reach 3.8%, and component
revenue is expected to grow at a 29.8% CAGR.
MD and HD Natural Gas CV Market: Compound Revenue Forecast , Europe, 2011 and 2018
MD and HD Natural Gas CV Market: Natural Gas CV Penetration Forecast, Europe, 2011 and 2018
MD and HD Natural Gas CV Market : OEM Growth Potential, Europe, 2011–2018
Un
its
0.7 %
3.8 %
2011 2018
472,000
404,452
Natural Gas CV
Penetration
Total Production
0.0
100.0
200.0
300.0
400.0
500.0 LNG CNG
2011 2018
€71.6 M
€446.1 M
Re
ve
nu
e (€
Mil
lio
n)
CAGR
29.8%
MD and HD Natural Gas CV Market: Key Takeaways, Europe, 2011
OEM Characteristics Growth
Potential
IVECO Broad product line from 3.5 tons to 26 tons
Daimler Strong presence in refuse market and early
mover in distribution market
Volvo Early mover in dual fuel platform through
technology partnerships
MAN Wide experience in manufacture of natural
gas engine and leader in bus segment
Scania Wide experience in manufacture of natural
gas engine. Note: All figures are rounded. The base year is 2011. Source: Frost & Sullivan Low
• IVECO’s broad product line and early mover
advantage will be critical for market share
growth in the truck segment.
• MAN is expected to lead the bus segment.
• The LNG component market will experience
a CAGR of 75.4% due to increasing LNG
infrastructure and wider adoption among
fleets.
2,750
18,200
8 M8D2-18
Global LNG Prices and Major Natural Gas Trade Patterns Imports from North America can drastically alter natural gas dynamics in Europe.
$
Spain
Belgium UK
Korea
Japan
Altamira
Lake Charles
Cove Point
$9.64 $2.55
$2.20
$2.65
$8.85 $9.0
$
$
$ $
$
$
$ $ $15.21
$15.21
347.8 MT
81.0 MT
103.2 MT
230.0 MT
India
121.7 MT
86.9 MT
79.2 MT 115.7 MT
110.1 MT
$13.61
179.4 MT
• Major NG exporting regions are Russia and Middle East with Europe and United States importing
greatest volumes historically.
• NG production from shale resources has steadily outgrown the demand in NA, resulting in oil companies
turning around to export gas across the Atlantic. US Federal Energy Regulatory Commission’s (FERC)
first approval for LNG exports from the lower 48 states for Cheniere Energy Inc. opens the gateway for
US natural gas producers to take advantage of global price differential.
MD and HD Natural Gas CV Market: NG Trade Patterns and LNG Prices, Global
Major natural gas
trade patterns
$ per million
btu
Global LNG
Prices
$13.60
Source: Frost & Sullivan
9 M8D2-18
Vast and well- mapped reserves
Strict regulatory framework
Unresolved environmental
concerns
High costs to develop resources Drivers
Restraints
Energy Independence
Shale Gas Reserves in Europe Significant recoverable reserves are identified in Poland, France, and Norway.
• Significant recoverable reserves have been
found in Poland, France, and Norway
• Due to the small scale/nascent activity, current
regional policies are believed to be adequate
for governing shale gas production in Europe.
Current policies include
o Mining waste directive
o Groundwater directive
o Water framework directive
o Registration, Evaluation, Authorisation and
Restriction of Chemicals (REACH)
Shale Gas Market: Exploration and Production Overview, Europe, 2012
Prospection / Exploration
Moratorium on Exploration
Bridge to low carbon future since
NG is more efficient and cleaner
fossil fuel Source: EIA, Frost & Sullivan
42
180
83
20 8
187
20
Shale Gas Reserves in trillion
cubic feet
No activity on shale gas
10 M8D2-18
Executive Summary—Total Trucks Shipped in the MD and HD CV Market Penetration of non-diesel fueled powertrain technologies in the truck segment to reach over 5% by 2018.
Note: All figures are rounded. The base year is 2011. Source: Frost & Sullivan
0
20
40
60
80
100
120
DAF Daimler IVECO MAN Scania Volvo Group
Un
its i
n T
ho
usan
ds
HEV NG Diesel
383,552 units
2011
449,300 units
2018
94.4% 97.9% 92%
4.7%
2.2 %
99.7%
1.8%
3.4%
0.2% 0.1%
MD and HD Natural Gas CV Market: Truck Unit Shipment Forecast, Europe, 2011 and 2018
1%
88.7% 97% 97.5% 95.6%
2.5% 0.6%
0.9% 3.3%
3.5%
2.4%
1.5%
8.8% 0.3%
• Truck production to increase at a compound annual growth rate of 2.3% over the 2011 to 2018 period.
• An EU mandate of 20% green house gas (GHG) reduction by 2020 will drive market for advanced
powertrain technologies.
• IVECO, Daimler, and Volvo are expected to lead the NG adoption in CVs among European OEMs.
2018 OEM Production Powertrain Split
11 M8D2-18
0
2
4
6
8
10
12
Daimler IVECO MAN Scania Volvo Group
Un
its
in
Th
ou
sa
nd
s
HEV NG Diesel
Executive Summary—Total Bus Market Europe Advanced powertrain adoption is expected to reach 33% by 2018; the hybrid and natural gas powertrain set
will benefit the most.
20,900 units
2011
22,700 Units
2018
67.1%
12.7%
86.5%
20.2%
8.6%
4.9%
81.7%
10.9%
7.4%
84.2%
12.1%
3.7%
91.9%
4%
4.1%
80.5%
6.8%
12.7%
77.1%
16.2%
6.7%
MD and HD Natural Gas CV Market: Bus Unit Shipment Forecast, Europe, 2011 and 2018
• Medium- and heavy-duty bus production forecast to grow at a 1% CAGR over the 2011 to 2018 period
• Despite slow growth in volumes, NG penetration will reach 12.7% by 2018.
• MAN and IVECO lead the natural gas adoption, while Volvo and Daimler shifting towards hybrid electric
vehicles in addition to showing interest in NG powertrain.
2018 OEM Production Powertrain Split
Note: All figures are rounded. The base year is 2011. Source: Frost & Sullivan
12 M8D2-18
• The engine power bandwidth in medium duty truck is between 180hp to 200hp while that of heavy duty
truck is between 245 hp to 460 hp and transit bus is 260 hp to 330 hp in 2011.
• Volvo provides 460hp in D13C 12.8 lit engine in truck segment based on dual fuel technology through
partnership with Clean Air Power.
• Most OEMs in Europe posses captive spark ignition natural gas engine platforms, hence any development
of high power engines will be swiftly applied to truck platforms in the long haul segment. The trend is
moving towards increasing engine sizes in medium and heavy duty trucks.
Executive Summary - European Natural Gas Engine’s Power Bandwidth Higher Power Spark Ignited Engines are Expected to be Launched by OEMs to Cater the Long
Haul Heavy Duty Segment
2011 2018
100
200
300
400
Power (hp)
Year
500
MDT 200hp
180hp
HDT
245hp
460hp
280hp HDT
500hp
MDT
250hp
200hp
Transit Bus
260 hp
330hp
2011 2018
Transit Bus
245hp
360hp
MD and HD Natural Gas CV Market: Engine Band Width, Europe, 2011
Source: Frost & Sullivan analysis.
“We are pretty happy about our LNG trucks. The
only thing is engine power could be increased”—
Senior Transport Consultant, European Fleet
13 M8D2-18
Executive Summary—Total NG CV OEM Transmission Market Automatic Transmission Plays a Major Role in Refuse and Bus Market with SI Engines while
Manual Transmission is Important in the Cost Sensitive Distribution Market.
Note: All figures are rounded; the base year is 2011. Source: Frost & Sullivan analysis.
0.0
20.0
40.0
60.0
80.0
100.0
Refuse Distribution LongHaul Bus
Manual Automated Manual Automatic 20% 0-5% 90%
5%
MD and HD Natural Gas CV Market: Duty Cycle Transmission Percentage Forecast, Europe, 2011
• Duty cycle such as refuse and construction require higher torque which is facilitated by means of
automatic transmission in spark ignited engines.
• Dual fuel engines being similar to CI engines generally have higher torque capacity, hence automated
manual transmission provides lower cost alternative to automatic transmission in long haul segment.
90-95%
10-15%
75-80%
30-35%
55-60%
5-10%
1-5%
85-90%
1-5%
2-5%
“Price is important, but we look at the overall lifecycle cost of the vehicle, which
is lower in case of automatic transmission”— Fleet Manager, European Fleet
2-5%
14 M8D2-18
Executive Summary—Technology Roadmap On-board natural gas tanks are experiencing new compositions of materials and designs, and new CI engine
architectures are now in focus among OEMs.
2006 2010 2014 2018
50% diesel substitution Dual fuel 70% diesel substitution
SI Technology
Industry Trends
CI-HPDI System
HPDI – Diesel Pilot 2–3%
CI-dual-fuel Mode
Vertical integration with OEM
SCR
Diesel pilot 5–
7%
Source: Frost & Sullivan
Aftermarket retrofitment
Throttle body injected – SI
OEM integration
Direct injection
Stoichiometric mixture with cooled EGR
Direct injection
Rich mixture with EGR
Automatic transmission
Manual transmission
CNG Tanks
LNG Tanks
HPDI-LNG Tanks
Type III cylinders Optimized packaging systems
based on OEM platforms Type IV cylinders
Engine-coolant-driven pressure
release system for fuel pumping
Cryogenic hydraulic pump for delivering high fuel pressure
Transmission
MD and HD Natural Gas CV Market: Technology and Product Roadmap, Europe, 2006-2018
Lean Burn Mixture
15 M8D2-18
Executive Summary—Comparison of Different Technologies Fuel flexibility, high end power, and torque engine performance is being cited as advantages for the growth of
dual fuel technology.
Dual Fuel Engines Direct injection NG NG (Spark Ignited)
Fuel flexibility Mixture of natural gas and
diesel or 100% diesel
Dedicated NG. Limp
home service mode on
diesel
Dedicated NG
Infrastructure concerns Not dependent on NG
Infrastructure
Dependent on NG
infrastructure
Dependent on NG
infrastructure
Engine Modifications No change in base engine Requires modification to
base engine
Requires modification to
base engine
Engine Performance
Matches diesel power,
torque and efficiency
Power Range: 460 hp
Matches diesel power,
torque, and efficiency
Power Range: 460 hp
Reduced power and
torque
Power range: 200-340
hp
Diesel Substitution
(by energy) 70-90% > 90% 100%
Source: Clean Air Power, Frost & Sullivan
16 M8D2-18
Parameters Current Future
Market Status
• 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).
• 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
• Top 4 OEMs control more than 90 per cent of the
truck NG market (Daimler, Volvo, Scania and
IVECO).
• 90% of the natural gas market is controlled by five
major OEM’s (MAN, Daimler, Scania, Volvo, and
IVECO) in buses.
• Competition is expected to intensify across the
forecast period with new participants entering
the market.
• There will be partnerships with NG engine
developers.
Technology
• There are dedicated SI engines which run on
CNG for short haul and refuse applications and
LNG for long haulage and distribution application.
• High power dedicated CI engines and dual
power engines will play a major role.
Barriers to enter
European Market
• 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.
Executive Summary—Key Conclusions and Future Outlook
Source: Frost & Sullivan
17 M8D2-18
The Last Word—Three Big Predictions
2
A €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.
3 By 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.
1
By 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 heavy-
duty buses will reach 12.7%.
Source: Frost & Sullivan
18 M8D2-18
Legal Disclaimer
Frost & 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 limited
publications 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 to
noncustomers 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 94041
19 M8D2-18
Market Engineering Methodology
Source: Frost & Sullivan
One of Frost & Sullivan’s 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.
Top Related