Evolving Euro Emission and Environmental Standards Expected to Boost the European Powertrain Market

Business Wire,  June 24, 2008  

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LONDON -- The European powertrain market is expected to positively benefit from the increasingly stringent emission norms for passenger cars and light vehicles laid down by the evolving regulatory framework of the European Union's EURO standards. Increased pricing pressure from original equipment manufacturers and Tier 1 suppliers is also expected to trigger merger and acquisition activity at the Tier 2 supplier level. Private equity investors can profit from investing in undervalued Tier 1 and Tier 2 automotive suppliers.

New analysis from Frost & Sullivan (http://www.financialservices.frost.com), European Powertrain Market - Investment Analysis, reveals that this market earned revenues of USD32.55 billion in 2007 and estimates this to reach USD41.05 billion by 2012.

If you are interested in a virtual brochure, which provides manufacturers, end users and other industry participants with an overview of the investment analysis and growth opportunities in the European powertrain market, then send an e-mail to Anna Anlauft, Corporate Communications, at anna.anlauft@frost.com, with your full name, company name, title, telephone number, company e-mail address, company website, city, state, and country. Upon receipt of the above information, an overview will be sent to you by e-mail.

"Evolving regulatory framework and stringent emission standards prevalent in the European Union are set to drive the growth of the European powertrain market," notes Frost & Sullivan Financial Analyst A. Sethuraman. "Declining system prices and increasing light vehicle population are expected to further boost the growth of different powertrain products between 2007 and 2012."

Tax credits and incentives provided by some of the European states have helped achieve higher installation rates for diesel particulate filters in the European passenger car and light vehicle market. Prominent among them are the tax incentives and benefits offered on diesel vehicles equipped with diesel particulate filters (DPFs), which are able to satisfy the emission norms well ahead of their introduction. Incentives in Germany added up to [euro]600 on costs of vehicles equipped with DPFs in 2004. Similarly, in France, vehicles equipped with these systems were eligible for an incentive of up to [euro]800.

However, technical reliability issues remain a major concern for companies operating in the European powertrain market. Additionally, there has been intense pressure to cut costs from car manufacturers and Original Equipment Manufacturers (OEMs), who have a higher purchasing power as compared to Tier 1 and Tier 2 suppliers.

"For example, end users and engineers alike are of the opinion that the shifting quality of automated manual transmissions (AMTs) is poor," says Sethuraman. "AMTs are known to be jerky and vehicle manufacturers are working towards easing the shifting procedure in terms of gear-shifting and clutch engagement."

Acquisitions of regional powertrain suppliers at the Tier 1 and Tier 2 levels, shifting production to low-cost based Asia Pacific countries such as China and India and joint ventures and strategic alliances with other market participants to leverage the benefits of each other's resources and expertise would be some of the key factors for success in the fiercely competitive European powertrain market.

European Powertrain Market - Investment Analysis is part of the Financial Benchmarking in the Automotive Industry programme, which also includes research services in the following markets: North American Bottled Water Industry - Investment Analysis and Growth Opportunities, North American Industrial Water Services and Outsourcing Market - Investment Analysis, Asia Pacific Residential Water Treatment Equipment - Investment Analysis and Growth Opportunities, European Residential Water Treatment Equipment Market - Investment Analysis and Growth Opportunities and North American Residential Water Treatment Equipment: Investment Analysis and Growth Opportunities. All research services included in subscriptions provide detailed market opportunities and industry trends that have been evaluated following extensive interviews with market participants. Interviews with the press are available.

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