Strategic Analysis of the Japanese Advanced Steering Systems Market
- Frost & Sullivan Press Release
Japanese Steering Systems Market Moves into High Gear
EPS and AS Systems on the Fast Track to Success
London, UK – 9 February, 2006 - The Japanese steering systems market is seeing an increasing shift in focus from hydraulic power steering (HPS) systems to electric power steering (EPS) systems mainly due to the fuel economy and other significant benefits offered by the latter. The stage is set for the rapid growth of EPS systems and the total market revenues are expected to increase from approximately €1490.0 million in 2005 to €1513.0 million in 2013 at a compound annual growth rate (CAGR) of 0.2 per cent.
“EPS systems are experiencing increasing demand as well as penetration and are likely to almost completely overtake HPS systems by 2020,” says Frost & Sullivan (http://transportation.frost.com) Research Analyst Jatin Khanna. “Nevertheless, even after 2015, original equipment manufacturers (OEMs) are likely to continue applying HPS in models that have extremely tight budgets and do not require the sophistication and features of EPS technology.”
However, electric hydraulic power steering (EHPS) systems are well on their way out in Japan, having received largely negative feedback from the industry. OEMs are reluctant to invest in these systems because of their unfavourable cost-benefit ratio. While EHPS systems cost almost 17-18 per cent more than HPS, their fuel economy is only marginally better than that of HPS systems, around 2 per cent more.
Cost-technology ratio is an important factor for vehicle manufacturers with all of them exerting tremendous pressure on suppliers to develop solutions that meet this ratio. EPS systems could fulfil vehicle manufacturers’ needs in this respect. Although more expensive than conventional HPS, EPS systems offer exceptional fuel economy and energy savings when compared to HPS. This is because EPS draws power on demand and is able to achieve an 85 per cent higher efficiency in converting electrical to mechanical energy.
Japanese OEMs are increasingly considering EPS systems since they are keen to reduce energy consumption and benefit from fuel savings as high as 0.2-0.3 litres per 100 kilometres in comparison to HPS systems.
At the same time, higher costs of EPS – approximately 198 euros for a column electric power steering (CEPS) system as opposed to 150 euros for a HPS system – are still a cause for concern for OEMs. There is likely to be a tendency to compare the prices of these two systems and find EPS lacking. EPS systems had only moderate uptake in the upper-medium and sports utility vehicle (SUV) segments of about 20 and 22 per cent respectively in 2004.
Nevertheless, EPS systems are well set for success and, as of 2004, were fitted in about 3.4 million vehicles in Japan. This figure is likely to reach 4.9 million in 2007, which clearly indicates the ample growth potential of these systems.
“There is little doubt that EPS is the technology of the decade for Japan because it offers better fuel economy, advanced features and higher scope for integration,” says Mr. Khanna. “Specifically, CEPS is the most sought-after technology in the EPS stable, with OEMs implementing these systems mainly in the lower vehicle segments.”
In the higher vehicle segments, rack electric power steering (REPS) is the fastest growing technology. Since REPS has the capacity to bear heavier front axle loads vehicle manufacturers consider it an apt replacement for HPS in popular heavy vehicles. In fact, the majority of vehicles in the medium and upper-medium segments are likely to shift from HPS to REPS over the medium to long term.
The demand for active steering (AS) systems is also on the rise, especially in the sports and luxury vehicle segments. Currently in its growth phase in Japan, this technology’s variable gear ratio function has been well received in the market, with many new introductions expected in 2007-2008.
“REPS system suppliers have tremendous potential in Japan, with the market size for these systems expected to exceed 1.5 million units by 2014,” says Mr. Khanna. “Given that the development of AS systems is based on a rack EPS solution, suppliers could develop the entire solution as a single unit, thereby offering a one-stop shop solution for OEMs that expect to apply AS.”
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List of Keywords in this Press Release: Japanese, advanced steering systems, hydraulic power steering, HPS, electric power steering, EPS, fuel economy, original equipment manufacturers, OEMs, electric hydraulic power steering, EHPS, vehicle manufacturers, column electric power steering, CEPS, rack electric power steering, REPS, active steering, AS