Quarter 1, 2011
North American Engine and Transmission Forecast COMMENTARY
Industry Observations Light vehicle sales in 2011 are on pace to exceed sales in 2010. Even with the supply shortages due to the earthquake and tsunami in Japan, we expect light vehicle sales to reach 13.0 million units this year, up from only 11.6 million units in 2010. We may domestic, Korean and European OEMs gain market share at the expense of the Japanese OEMs. Production also looks robust, and Japanese OEMs may increase production in the US to compensate for problems in Japan. However, parts shortages in Japan are also affecting US production in the short term. Our production forecast for 2011 remains at 12.8 million units. Whatever shortfall in production in Q2 will be made up in the second half of this year.
Earlier this year, the EPA and NHTSA formally agreed on a final ruling for CAFE standards from 2012 to 2016. In the final ruling, there are different standards for passenger cars and light trucks. The EPA and NHTSA rulings combine miles per gallon targets and C02 targets. For example, the 2011 model year target is 325 grams of C02 per mile which equates to 27 mpg. There are also targets for other greenhouse gas (GHG) emissions; the N2O target is 0.01 g/mile and the CH4 (methane) target is 0.03 g/mi in MY2016. Cars and light trucks each have a separate “S-curve” whereby a certain mile per gallon (mpg) target is required according to the footprint of the vehicle. The footprint is the wheelbase multiplied by the average track width in square feet. For passenger cars, the lower constraint is 41 sq. ft. and the upper constraint in 56 sq. ft. Larger footprint vehicles have a lower mpg target than smaller vehicles. For light trucks, the lower constraint is still 41 sq. ft. but the upper constraint in 66 sq. ft. In order to reach the MY2016 fuel economy standard, the fleet average fuel economy needs to improve by 4.3% per year from MY2011 to MY2016. Passenger cars are expected to have a fuel economy of 39 mpg while light truck fuel economy will be around 30 mpg. If we take some specific examples by vehicle, a Honda Fit which has a 40 sq. ft. footprint would be required to have a fuel economy of 41.1 mpg in MY2016. By comparison, the average fuel economy for the MY2010 Fit with an automatic transmission is 30.5 mpg. Currently, only hybrids such as the Toyota Prius and Ford Fusion hybrid achieve more than 35.5 mpg combined. Does this mean that all light vehicles will have to be hybrids in 2016? Not really. But we do expect hybrid sales to increase significantly over the next seven years, and the share of diesels, gasoline direct injection vehicles, and turbocharged vehicles will also increase to help meet the new fleet average without making too many sacrifices in terms of power and comfort. CAFE Standards by Model Year 2012 - 33.8 mpg for cars, 25.7 mpg for trucks. 30.1 mpg fleet average. 2013 - 34.7 mpg for cars, 26.4 mpg for trucks. 31.1 mpg fleet average. 2014 - 36.0 mpg for cars, 27.3 mpg for trucks. 32.2 mpg fleet average. 2015 - 37.7 mpg for cars, 28.5 mpg for trucks. 33.8 mpg fleet average. 2016 - 39.5 mpg for cars, 29.8 mpg for trucks. 35.5 mpg fleet average. It remains to be seen how much all these changes will cost. We have already seen average light vehicle prices jump from around $26,000 before the economy collapse to about $28.000. The average vehicle is likely to cost over $30,000 in the next few years, which could depress the market overall regardless of what the fuel economy standards are.
CO-1 Copyright © 2011 J.D. Power and Associates, The McGraw-Hill Companies Inc., All Rights Reserved
North American Engine and Transmission Forecast
Quarter 1, 2011
COMMENTARY Taxation US President Barack Obama on Friday signed the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010. The bill contains a number of provisions related to energy and within that, provisions related to fuels.
Ethanol - The bill extends the Volumetric Ethanol Excise Tax Credit (VEETC) through 2011 at the current rate of $0.45/gallon US. The bill also extends through 2011 the existing $0.54/gallon, secondary tariff on imported ethanol and the related tariff ($0.227/gallon) tariff on ethyl tertiary-butyl ether (ETBE). The bill also extends through 2011 the $0.10/gallon producer tax credit for small ethanol producers producing no more 60 million gallon of ethanol a year. The tax credit is applicable to only the first 15 million gallons of production for eligible producers.
Biodiesel and renewable diesel - The bill extends the $1/gallon US production tax credit for biodiesel and diesel fuel created from biomass, as well as the $0.10/gallon credit for small agri-biodiesel producers through 2011.
Alt fuel and alt fuel mixtures - The bill extends through 2011 the $0.50/gallon production tax credit for alternative liquid fuels derived from biomass, compressed or liquefied biogas, national gas and propane. The bill excludes black liquor (liquid fuel derived from a pulp or paper manufacturing process) from credit eligibility.
In February, the Obama administration proposed ending a clean-diesel grant program and cutting research for hydrogen fuel-cell vehicles while spurring the market for electric cars. The U.S. Environmental Protection Agency’s fiscal 2012 budget reduces the Clean Diesel Program’s budget from $80 million in 2010 to zero. The program was reauthorized by Congress for five years and a total of $500 million in December. President Barack Obama is working to realign the U.S. government’s vehicle-technology priorities. His budget proposes diverting funds from a dozen energy-company tax breaks to help put more electric vehicles on the road, doubling the share of electricity from so-called clean energy by 2035 and increasing the efficiency of energy use in buildings by 20 percent. The budget proposal would transform a $7,500 tax credit for buyers of plug-in electric cars into a rebate at the dealership so purchasers wouldn’t have to wait to claim the credit on tax returns. Obama, in his State of the Union address last month, reiterated his goal of having 1 million electric vehicles, both plug-in and hybrid electric, on U.S. roads in four years. The following cars get at least 40 miles per gallon on the highway: 2011 Ford Fiesta, 2012 Focus 2011 Chevrolet Cruze Eco 2011 Hyundai Elantra, 2012 Accent, 2012 Veloster Smart ForTwo 2012 Mazda3 with SkyActiv engine technology CO-2 Copyright © 2011 J.D. Power and Associates, The McGraw-Hill Companies Inc., All Rights Reserved
Quarter 1, 2011
North American Engine and Transmission Forecast COMMENTARY
Technology Feature: Scuderi Air-Hybrid Split-cycle Engine Once a quarter we will examine a new engine or transmission technology that has the potential to alter the powertrain landscape. Here we will describe the split-cycle engine from the Scuderi Group. The have been working on this engine with the Southwest Research Instittue (SWRI). The Scuderi engine divides the four strokes of a combustion cycle between two paired cylinders. The left cylinder acts as an air compressor, handling intake and compression, while the right cylinder handles combustion and exhaust. The engine fires after top dead center and the company claims that the engine reduces NOx emissions by up to 80% and improves fuel efficiency by 50% compared to a conventional gasoline engine. The engine requires one crankshaft revolution to complete a single combustion cycle and is expected to have higher torque, thermodynamic efficiency, and lower emissions than conventional engines. An air-hybrid configuration of the engine adds a compressed air storage tank. As with conventional four-stroke engine designs, the combustion cycle of the Scuderi Engine has two highpressure strokes—compression and power, and two low-pressure strokes—intake and exhaust. With the compression cylinder separated from the power cylinder, the use of a standard turbocharger to convert recovered exhaust-gas energy into compressed air energy supports the downsizing of the compression cylinder to achieve substantial reductions in negative compression work. At the 2011 SAE World Congress in Detroit this April, the Scuderi Group showed a turbocharged air-hybrid splitcycle engine. The turbine is driven by the exhaust gas, which then hits the compressor. The boosted engine decreased the BSFC (brake specific fuel consumption) by up to 14% compared to the air-hybrid engine, while increasing the engine’s power BMEP (brake mean effective pressure) by 140%. According to Sal Scuderi, President of the Scuderi Group, the amount that ends up on the crankshaft is the difference between the negative work and the positive work. And when you split the cycles like this you can now try to figure out ways to reduce that negative side without impacting the power side. We determined that if you put a simple standard turbocharger onto the engine, and you feed more air into the compression side—now it’s coming in at higher mass flow and high pressure—when you do that on a normal engine, what happens is that the pressures in that compression stroke goes up. Your power goes up, but you’ve pushed more mass into the cylinder and when you squeeze it you’re getting a higher pressure. Now, when you fire, you’ve got more air at a higher pressure, you’ll get more power out, but the efficiency doesn’t go up. In other words, you’ve got more power, but you’ve also have more negative work going in. If we control the pressures of the engine internally so that you are not causing more pressure to occur, what happens is you cause less work of compression to come off the crank. If I boost it to say 2 bar, I have twice the mass of air. Now when I compress to get to my naturally aspirated compression levels, I only have to boost halfway, because we normalize. We don’s let the pressures go up to where they would normally be. So you literally do less compression work for the crank. In other words, the energy off the exhaust is actually doing some of the compression work for us. By doing that, the volumetric efficiency of the compression side goes way up. The net effect is the compression work goes down, the engine gets smaller and the efficiency gets better. The Scuderi Group tested their engine in a Nissan Sentra passenger car and achieved 9-15% better fuel economy than the same car with a conventional gasoline engine.
CO-3 Copyright © 2011 J.D. Power and Associates, The McGraw-Hill Companies Inc., All Rights Reserved
North American Engine and Transmission Forecast
Quarter 1, 2011
COMMENTARY
Light Vehicle Sales Analysis – Engine Data The Power Information Network, or PIN, collects daily retail transaction data from dealerships across the U.S. The following two tables show sales by fuel type and by number of cylinders respectively.
Table 1 - Sales of Light Vehicles in the U.S. by Fuel Type January – March 2011
Fuel type Gas Flex Hybrid Diesel
Jan-Mar 2011 82.1% 12.5% 3.1% 2.2%
Jan-Mar 2010 85.4% 10.0% 2.4% 2.1%
Gasoline is by far the most popular fuel choice available, but the gasoline share dropped by 3.3% compared to the first three months of 2010. This was mainly at the expense of flex-fuel vehicles, whose availability increased by 2.5% this year to help meet the tougher 2011 CAFE standards. The other significant increase is in hybrid vehicles. The hybrid share increased from 2.4% in Q1 2010 to 3.1% in Q1 2011, in large part due to gas prices above $3.50/gallon this year. The diesel share increased slightly from 2.1% to 2.2%. We expect the diesel share to increase slightly in the rest of the year, and the hybrid share will remain in the 3% range as gas prices stay in the $3.50-4.00/gallon range.
Table 2 - Sales of Light Vehicles in the U.S. by Number of Cylinders January – March 2011
Cylinders 3 Cyl 4 Cyl 5 Cyl 6 Cyl 8 Cyl 10 Cyl
Retail Sales by Number of Cylinders Jan-Mar 11 Jan-Mar 10 0.0% 0.0% 50.7% 46.2% 1.3% 1.1% 33.5% 36.6% 14.5% 16.0% 0.0% 0.1%
Difference 0.0% 4.5% 0.2% -3.1% -1.5% -0.1%
•
The 4-cylinder share increased by 4.5% from Q1 2010 to Q1 2011 due to higher gas prices.
•
The 6-cylinder share dropped by 3.1% at the expense of 4-cylinder engines
•
The V-8 share dropped by 1.5% due to the weakening truck market and the shift from V-8 to V-6
•
The 5-cylinder share increased slightly due to the growth of Volkswagen
CO-4 Copyright © 2011 J.D. Power and Associates, The McGraw-Hill Companies Inc., All Rights Reserved
Quarter 1, 2011
North American Engine and Transmission Forecast COMMENTARY
Transmissions by Speed Used in NA built Light Vehicles
100%
80%
Percentage
9-speed 1-speed (electric)
60%
Infinite (CVT) 4-speed
40%
8-speed 7-speed 6-speed
20%
5-speed 0% 2009
2010
2011
2012
2013
2014
2015
2016
YEAR
Source: J.D. Power and Associates Engine and Transmission Forecast Q1 2011
•
Six-speeds are the most popular choice going forward. This includes automatic, manual and dual clutch transmissions.
•
The CVT share will grow slowly, with an increase in the share of FWD compact cars
•
The share of four-and five-speed transmissions decrease in share from 2010-16.
•
The one-speed gearboxes are limited to electric vehicles such as the Tesla Roadster and the Nissan Leaf which will be produced in Tennessee instead of being imported from Japan in future.
•
Six-speed transmissions will account for 61% of all transmissions by 2016.
•
The share of eight and nine-speed transmissions will start to grow in 2014.
CO-5 Copyright © 2011 J.D. Power and Associates, The McGraw-Hill Companies Inc., All Rights Reserved
North American Engine and Transmission Forecast
Quarter 1, 2011
COMMENTARY North American Transmission Usage by Type
Share
100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%
Automated Manual CVT Electric Manual Dual Clutch Automatic
16 20
15 20
14 20
13 20
12 20
11 20
10 20
09 20
Year
Source: J.D. Power and Associates Engine and Transmission Forecast Q1 2011
The graph and table below show that the share of four-cylinder engines produced in North America will increase significantly lover the forecast period. This increase will occur at the expense of six and eight-cylinder engines. By 2016, the four-cylinder share will be 53% while six-and eight-cylinder engines combined will only account for 47% of engine production. The share of I-5 engines will remain in the 1.0 to 1.5% range. We also expect to see the introduction of two- and three-cylinder engines in 2012/13, but in very limited numbers – less than 0.5% share combined.
North American Engine Production by Number of Cylinders
18,000,000 16,000,000
Production volume
14,000,000
V-10
12,000,000
V-8 I-6/V-6
10,000,000
I-5
8,000,000
I-4 I-2
6,000,000 4,000,000 2,000,000 0 2009
2010
2011
2012
2013
2014
2015
2016
Ye ar
Source: J.D. Power and Associates Engine and Transmission Forecast Q1 2011
CO-6 Copyright Š 2011 J.D. Power and Associates, The McGraw-Hill Companies Inc., All Rights Reserved
Quarter 1, 2011
North American Engine and Transmission Forecast COMMENTARY Table 3 – NAFTA Light Vehicle Production by Number of Cylinders
Cylinders I-2 I-3 I-4 I-5 I-6/V-6 V-8 V-10 N/A TOTAL
2009 0% 0% 42% 1% 34% 22% 0.1% 0.0% 100%
2010 0% 0% 43% 1% 36% 21% 0.1% 0.01% 100%
2011
2012
0% 0% 45% 0.8% 35% 18% 0.1% 0.05% 100%
0% 0.4% 49% 1% 32% 17% 0.1% 0.13% 100%
2013 0% 0.3% 49% 1% 33% 16% 0.0% 0.4% 100%
2014 0.1% 0.3% 51% 1% 31% 16% 0.00% 0.4% 100%
2015 0.1% 0.3% 52% 1% 31% 15% 0.000% 0.4% 100%
2016 0.1% 0.3% 53% 1% 31% 15% 0% 0.4% 100%
Note: the ‘N/A’ in the table above represents electric vehicles. We do not expect to see significant volumes of electric vehicles (BEVs) until 2016 at the earliest. We expect to see more plug-in vehicles (PHEVs), which include a gasoline or flex-fuel engine. Most PHEVs will have a four-cylinder engine, which is another reason why we expect to see an increase in the I-4 share. Hybrids also typically use a four or six-cylinder engine, so the increase in hybrid vehicle production will help traditional ICEs as well.
Engine size by displacement The most popular engine range in 2009 was 2.0 to 2.99 liters, followed by the 3.0 - 3.99 liter range. The market shift toward smaller engines is apparent over the next few years. From 2012 to 2016, the 0 - 1.99 liter range will be the most popular followed by the 2.0 – 2.99 liter and then the 3.0 - 3.99 liter range. As the U.S. market continues to downsize, the 0 to 1.9 liter range will grow to over 4 million units in 2013 and over 5 million in 2015. The sub-2 liter range will account for 32% of engine production in 2016, while the largest engines account for only 8% of engine production. In 2009, the share of 5L+ engines was 16.4%. The 4-5 liter share remains in the 7-9% range, while the 2-3 liter share drops from 31% in 2009 to 27% in 2016.
Table 4 - North American Engine Production by Engine Size (Volumes in millions) Electric 0 to 1.99L 2.0 to 2.99L 3.0 to 3.99L 4.0 to 4.99L 5L+
Displacement
2009 0.00 1.47 2.68 2.38 0.63 1.40
2010 0.00 2.01 3.72 3.49 0.80 1.90
2011 0.01 2.77 3.76 3.78 0.73 1.90
2012 0.02 3.88 3.62 3.83 0.77 1.89
2013 0.05 4.31 3.72 4.04 1.09 1.56
2014 0.06 4.79 4.21 3.80 1.43 1.34
2015 0.07 5.10 4.33 3.79 1.43 1.29
2016 0.07 5.25 4.43 3.80 1.40 1.30
Total
8.56
11.92
12.94
14.00
14.77
15.62
16.02
16.25
Source: J.D. Power and Associates Engine and Transmission Forecast Q1 2011
CO-7 Copyright © 2011 J.D. Power and Associates, The McGraw-Hill Companies Inc., All Rights Reserved
North American Engine and Transmission Forecast
Quarter 1, 2011
COMMENTARY Engine Production by Displacement
100% Electric
80%
5L+ 4.0 to 4.99L 3.0 to 3.99L
60%
2.0 to 2.99L
Share
0 to 1.99L
40% 20% 0%
2009 2010 2011 2012 2013 2014 2015 2016 YEAR
Source: J.D. Power and Associates Engine and Transmission Forecast Q1 2011
CO-8 Copyright Š 2011 J.D. Power and Associates, The McGraw-Hill Companies Inc., All Rights Reserved
Quarter 1, 2011
North American Engine and Transmission Forecast COMMENTARY
2012/13 Model Year Vehicles Chrysler The 2012 Chrysler 300, Dodge Charger, and Jeep Grand Cherokee SRT8 all get the new 6.4-liter Hemi V-8 engine. This new engine replaces the 6.1-liter version. In each of the three vehicles, the engine delivers an estimated 465 horsepower and 465 lb.-ft. of torque – an improvement of 45 horsepower and 45 lb.-ft. torque over the 6.1-liter HEMI V-8 it replaces. The new Hemi engine uses cylinder deactivation for improved fuel economy. Ford The 2013 Ford Taurus will include a 2.0-liter Ecoboost engine producing 237 horsepower and 31 mpg hwy. GM GM is increasing the horsepower of the 2012 Cadillac CTS from 304hp to 218hp in the 3.6-liter version. Torque is only increased slightly from 370 Nm to 372 Nm. The 2012 Cadillac SRX drops the 2.8-liter turbocharged V-6 and adds the naturally-aspirated 3.6-liter V6. The latter will produce over 300hp. The 2013 Chevrolet Malibu was unveiled at the Shanghai Auto Show in China and the New York Auto Show at the same time. The new Malibu replaces the existing 2.4-liter engine with a 190 hp 2.5-liter direct injection engine, and there will not be a V-6 option. However, there will be a new mild-hybrid Malibu using a 2.4-liter engine and the new eAssist system to provide 38 miles per gallon in the highway. The engines are mated to a six-speed automatic transmission. The 2013 Malibu goes on sale in 2012. The 2012 Chevrolet Camaro gets the new LFX High Feature which delivers an SAE-certified 323 horsepower (241 kW) at 6,800 rpm. This is 11 horsepower (8 kW) more than 2011 models. The new engine still delivers an estimated 30 mpg on the highway. Honda th
Honda introduced the 9 generation Civic at the New York Auto Show in April. The new sedan and Coupe are powered by a 1.8-liter inline 4-cylinder engine with a 16-valve i-VTEC valvetrain. The engine produces 140 horsepower at 6500 rpm and 128 lb-ft. of torque. Manual transmission is standard and an automatic transmission is optional. The Civic Si uses a 2.4-liter i-VTEC 4-cylinder engine instead of the 2.0-liter engine in the previous generation. The new engine produces 201 horsepower @ 7000 rpm and 170 lb-ft. torque. The engine in the Si is mated to a six-speed manual transmission with a helical-type limited-slip differential (LSD). Subaru The 2012 Impreza replaces the 2.5-liter boxer engine with a 148hp 2.0-liter boxer engine. The latter is mated to a five-speed manual transmission or the second-generation Lineartronic® CVT (continuously variable transmission). The 2012 Impreza is rated at 27 mpg city and 36 mpg highway. Every 2012 Impreza is equipped as standard with Symmetrical All-Wheel Drive. Volkswagen The 2012 new “New” Beetle will have four gasoline engine choices and two diesel engine options. However, the US market only gets the 2.0 and 2.5-liter gasoline engines and the 2.0-liter diesel engine. The 1.2 and 1.4 –liter TSI engines are for the European market, as well as the 1.6-liter diesel engine. Six-speed manual, automatic and dual clutch transmissions are available. An R version producing 270 horsepower may follow about a year after launch. This would be a supercharged or twin-turbo version of the 2.0-liter engine. CO-9 Copyright © 2011 J.D. Power and Associates, The McGraw-Hill Companies Inc., All Rights Reserved