Strategic Analysis of the Latin American Powertrain Market
Executive Summary—Key Findings
Gasoline powertrains are expected to dominate the vehicle production mix in Latin America (LATAM) by 2020 with a share of to %, closely followed by flex fuel vehicles (FFV) at about to %. The diesel engine market is expected to experience growth in Chile, Argentina, and Colombia.
Over % of vehicles produced in LATAM by 2020 are expected to have transmissions manufactured in-house by original equipment manufacturers (OEM). Volkswagen (VW), General Motors (GM), and Ford will hold a share of almost % by 2020. ZF Friedrichshafen AG and JATCO Ltd. are expected to have the highest growth, with a cumulative share of % because of high-speed transmissions (8- and 9-speed automatic transmission (AT)) and continuously variable transmission (CVT), respectively.
In terms of gasoline and FFV production, variable valvetrain, direct injection (DI), and turbocharging are expected to witness accelerated growth, accounting for a market of over million, million, and million by 2020, respectively.
Powertrain outlook: Production of FFVs are expected to continue dominating with a share of to % by 2020. The current ban on diesel vehicles is expected to limit growth to a minimum of to % by 2020 because of the uptake in the sports utility vehicle (SUV) and pickup segments. At to %, manual transmissions (MT) are expected to continue dominating vehicle production.
Powertrain technologies: INOVAR’s energy efficiency target of 1.82 megajoule (MJ)/km by 2017 is expected to be a key driver for the uptake of next-generation powertrain technologies, especially for FFVs. Ford’s DI flex engine and Fiat’s flex MultiAir are efforts in this direction. Flex DI and flex turbo are both expected to be present on over vehicles by 2020. In terms of research and development (R&D), micro-hybrids flex applications and powertrain lightweighting are other technologies expected to gain importance by the end of the decade. INOVAR 2 is expected to look toward fuel cells R&D, local supplier development, and increased emphasis on cleaner vehicles.
Powertrain outlook: Argentina is a key country in LATAM for sales of diesel vehicles and is expected to account for a share of 19 to % by 2020. The compressed natural gas (CNG) conversion market accounts for about units per year, which is expected to encourage the sales of OEM-fitted bi-fuel vehicles in the short-to-medium term. In terms of vehicle production, gasoline is expected to continue dominating with a share of to % by 2020.
Powertrain technologies: The adoption of the Euro 5 emission norms in 2015 is expected to propel the uptake of diesel technologies such as a diesel particulate filter (DPF) (over % by 2020) and diesel variable-geometry turbo (VGT) ( to% by 2020). In terms of gasoline technologies, variable valve timing (VVT) is expected to have a penetration of close to % within the gasoline vehicles produced in Argentina by 2020.
Powertrain outlook: As a hub for US vehicle production, over 80% of vehicles by 2020 are expected to be gasoline. This is a key influencer for Mexico’s gasoline-dominated vehicle sales market, which is expected to account for over % by 2020. This is a key reason for the production of vehicles with CVTs, which is expected to have a share of to % by 2020 (the highest in the LATAM region), driven by Nissan and Honda.
Powertrain technologies: The 2016 SEMARNAT target of kilometers per liter (km/L), along with credits offered for the introduction of next-generation technologies, is expected to fuel the market for gasoline direct injection (GDI), VVT, turbocharging, dual clutch transmissions (DCT), and CVT transmissions. OEMs are expected to adhere to their global powertrain strategies, a result of which GDI and gasoline turbo charging are expected to experience growth in Mexico.
Chile: In terms of vehicle sales, although gasoline is dominant, diesel vehicles account for a % share, primarily because of the uptake in the SUV and pickup segments. Moreover, the early uptake of Euro emissions for diesel vehicles is expected to propel the uptake of DPF to over % and diesel VGT to over % by 2020. Chile has a feebate proposal in consideration, in view of reducing the fleet average carbon dioxide (CO2) emissions.
Colombia: In terms of vehicle sales, Colombia is a gasoline-dominated market with a share of over 80% and over % in vehicle production. By 2020, however, the share of diesel is expected to account for about to % of production and over % of vehicle sales. Delayed uptake of Euro norms is expected to encourage technologies such as diesel fixed geometry turbo (FGT). With a share of over %, multiport fuel injection (MPFI) is expected to continue to be mainstream.
Peru: With a share of about%, gasoline engines dominate the market in Peru. By 2020, growth is expected in CNG vehicles because of the current investments in infrastructure and OEM offerings. Emission regulations are expected to harmonize with fuel quality, leading to the possibilities of moving from Euro 3 to Euro 5 in 2018/2019, depending on the completion of initiated refinery modernizations.
About this report
Emission regulations and fuel economy standards are among the key drivers for the advancement of the Latin American powertrain market. The automotive structure of each country in Latin America presents varying drivers, challenges, trends, and powertrain markets. In terms of vehicle sales and production, this study forecasts the powertrain mix, transmission mix, and powertrain technologies such as injection, boosting, variable valve timing, and select exhaust aftertreatment technologies. The market forecast breakdown by OEM, region, transmission speed, and vehicle segment are discussed, followed by select OEM profiles and top predictions. The study discusses how Latin America is expected to have the most sustainable powertrain mix worldwide by 2020.
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