European Drivers' Desire for Automated Manuals and Dual Clutch Transmissions - Paving way for a New Generation of Alternative Transmission Technologies

LONDON, April 27 -- The constant strive towards improved driving performance, increased operational comfort and both improved fuel efficiency and emission characteristics, are only some of the key reasons that have driven the evolution of today's transmission technologies market. Alternative transmission technologies such as automated manual transmissions and dual clutch transmissions have opened up new avenues for the manufacturers and customers alike to explore. With significant uptake rates expected on technologies offered as options, - up to 20 percent within the Compact segment for automated manual transmissions, for example - and consequent additional revenues, vehicle manufacturers are seriously considering larger scale implementation of alternative transmission technologies. With automated manual transmissions and dual clutch transmissions significantly improving the gear shifting comfort and contributing to reduced fuel consumption and emissions, growth opportunities in the market are plenty.

Alliances and strategic co-operations between Tier 1 suppliers and vehicle manufacturers appear to be a strong trend within the transmission systems market, expected to contribute significantly towards technological innovation and customisation of technological solutions. Both vehicle manufacturers and suppliers have their gains from technical alliances: suppliers are guaranteed a healthy and constant pipeline of orders and vehicle manufacturers obtain an exclusive technological solution for their vehicles. Significant examples include the collaboration between BorgWarner and the Volkswagen Group, which generated the dual clutch transmission technology, and the alliance between Ford Motor Company and Getrag Transmissions, for the exclusive supply of stepped manual transmissions for the Ford Group.

"The small, compact and medium segments are the most favourable in terms of volumes available for production," says Frost & Sullivan (http://automotive.frost.com) Research Analyst Mr. Kaushik Madhavan. "These segments are likely to be the most lucrative for the introduction of alternative transmission technologies as the economies-of-scale are most favourable. As consumers are willing to pay more for advanced and efficient technologies as well as upgrade to better equipped vehicles, even the smaller basic, compact and medium segments have tremendous growth opportunities."

The European automotive industry is witnessing a significant shift towards modularisation and modular outsourcing, with interior modules and systems leading the way. Following this trend, Powertrain components are also expected to go the modularisation way with the advantages being far too significant to ignore. With regard to transmission technologies, modularisation is likely to happen in the direction of integrating peripheral components such as transmission differential and the control module for clutch actuation. Modularisation is likely to be favourable for models with sufficient production volumes with favourable 'economies-of-scale'. This brings the niche segment vehicles with specialised transmission technologies into focus.

Transmission technologies in Europe earned revenues of EUR 14.93 billion during 2005 and are likely to generate EUR 17.22 billion by 2012 states Mr. Madhavan.

A near three-quarter market share of stepped manuals earlier in the decade has reduced to about 71 per cent in 2004 and is likely to further decrease to 49 per cent by 2012. Complimenting this is the increase in the market share of AMT and DCT, which - put together - are likely to account for about 28 per cent of the total transmission market by 2012.

Further, as a common assembly line operates for stepped manuals, automated manuals, and dual- clutch transmissions, changes needed in production, assembly lines are minimised, and manufacturers are able to synchronise production with industry fluctuation and demand.

In terms of customers in need of upgrading to higher segment vehicles, this is likely to work in favour of automated manual transmission companies. As a result, with minimum investment, the manufacturers stand to gain as they increase the share of automated manual technologies within their portfolio.

Vehicle manufacturers with production volumes concentrated in the lower vehicle segments such as Ford Motor Company, Groupe Renault and General Motors generally tend to have a higher concentration of stepped manual transmissions. With customers looking to upgrade to higher segment vehicles, this is expected to work in favour of such companies as increasing number of consumers are expected to opt for automated manuals. Increasing number of customers are willing to pay the price premium associated with automated manuals. As a result, the manufacturers stand to gain as they increase the share of AMTs within their portfolio. Increased sales and revenues associated with automated manuals can also be expected, as the investments required are restricted to a minimum.

With increasing amount of electronics used in transmission technologies, the number of add-on modules is expected to increase leading to challenges with regard to space constraints. Front mounted transverse installations are expected to be the most affected. Also with the number of gear ratios increasing from the current five speeds to six and seven speeds, technology suppliers are obliged to develop transmissions with similar exterior dimensions of their predecessors. The emergence of innovative transmission technologies such as the three-shaft transmission are expected to be very popular in smaller vehicle segments where space comes at a premium and manufacturers are always devising newer ways to save space. In this case, a six-speed transmission occupies the space of a four-speed transmission along with offering high torque transfer capabilities. With smaller cars being equipped with more powerful engines, the torque transmission capability is also expected to be an important factor in the adoption of a transmission.

Nevertheless, compliance with the regulations of the Automobile Manufacturers Association of Europe (ACEA) on reducing CO2 emissions will spur greater uptake of alternative transmissions technologies. As a result, manufacturers will implement these advanced transmissions not only in high 'comfort-aware' vehicle segments, but also in mini and small vehicle segments, where customers are increasingly demanding comfort-oriented versions of the powertrain.

If you are interested in a virtual brochure, which provides manufacturers, end users, and other industry participants with an overview of the latest analysis of the European Market for Next Generation Transmission Technologies please send an e-mail to Magdalena Oberland- Corporate Communications at magdalena.oberland@frost.com. Please provide the following information: your full name, company name, title, telephone number, e-mail address, city, state, and country. We will send you the information via email upon receipt of the above information.

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List of key industry participants: Aisin AW, Aisin Seiki, Audi, BMW, BorgWarner, DaimlerChrysler, Ferrari, Fiat Auto, Freudenberg, FTE Automotive, Getrag, GKN, JATCO, Magneti Marelli, Mitsubishi, Opel, Peugeot Citroen, Porsche, PSA, PSA Peugeot Citroen, Renault, Renault-Nissan, Smart, ThyssenKrupp, Volkswagen, Volvo, ZF

List of keywords in this press release: next-generation transmission technologies, Europe, automated manual transmissions, AMT, dual-clutch transmissions, DCT, stepped manual transmissions, economies of scale, smaller basic segment, compact segment, medium, segment, assembly line, comfort aware, powertrain, Automobile Manufacturers Association of Europe, ACEA, research, information, market, trends, technology, service, forecast

Media Contacts: Europe: Magdalena Oberland, Corporate Communications, P: +44(0)20-7915-7876, E: magdalena.oberland@frost.com; Tolu Babalola, Corporate Communications - Americas, P: +1-210-477-8427, F: +1-210-348-1003, E: tolu.babalola@frost.com; Asia Pacific, Donna Jeremiah, Corporate Communications, P: +603-6304-5832, F: +603-6201-7402, E: djeremiah@frost.com; India: Surbhi Dedhia, Corporate Communications, P: +91-22-2832-4705 Ext: 131 E: sdedhia@frost.com; Australia: Sharmin Jassal, Corporate Communications, P: +61-2-8247-8900, E: sjassal@frost.com