OE Automotive filters: A global market review SAMPLE

August 2003

All content copyright © 2003 Aroq Limited

OE automotive filters: A global market review

Author: Matthew Beecham Published July 2003

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OE automotive filters: A global market review

All content copyright © 2003 Aroq Limited

Table of Contents

Table of Contents ................................................................................................................................................................... i List of Tables ......................................................................................................................................................................... ii Chapter 1 Introduction .......................................................................................................................................................... 1 Filter facts ................................................................................................................................................................................ 1 Report coverage ...................................................................................................................................................................... 2 Chapter 2 The market............................................................................................................................................................ 3 Product definitions and trends - Air filters................................................................................................................................ 3 Oil filters................................................................................................................................................................................... 4 Fuel filters ................................................................................................................................ Error! Bookmark not defined. Cabin filters.............................................................................................................................. Error! Bookmark not defined. Market players ......................................................................................................................... Error! Bookmark not defined. Europe ..................................................................................................................................... Error! Bookmark not defined. Asia-Pacific region................................................................................................................... Error! Bookmark not defined. North America.......................................................................................................................... Error! Bookmark not defined. South America ......................................................................................................................... Error! Bookmark not defined. Merger, acquisition and joint venture activity........................................................................... Error! Bookmark not defined. Chapter 3 Manufacturers .......................................................................................................... Error! Bookmark not defined. ArvinMeritor ............................................................................................................................. Error! Bookmark not defined. Dana ........................................................................................................................................ Error! Bookmark not defined. Denso ...................................................................................................................................... Error! Bookmark not defined. Honeywell ................................................................................................................................ Error! Bookmark not defined. Mahle....................................................................................................................................... Error! Bookmark not defined. Mann & Hummel...................................................................................................................... Error! Bookmark not defined. Sogefi ...................................................................................................................................... Error! Bookmark not defined.

OE automotive filters: A global market review

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List of Tables

Table 1: Mahle’s filtration divisional financial performance, 2001 - 2002 (€ millions, unless otherwise indicated) ......... Error! Bookmark not defined. Table 2: Sogefi’s filtration divisional financial performance, 2002¹ (€ millions, unless otherwise indicated) Error! Bookmark not defined.

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Chapter 1 Introduction

Chapter 1 Introduction Filter facts The automotive filtration business is basically concerned with air, oil, fuel (petrol and diesel) and cabin filters. For years, environmental considerations have dictated filter innovation. Modular oil filters have gradually been introduced, allowing only the filter element to be changed. Eco-warriors will welcome the move from spin-on oil filters to a module that bolts on to the engine allowing the metal-free paper cartridge to be removed and incinerated. Longer-life filters also serve the interests of the environment. Visteon has developed a new air filter that is designed to last the life of an engine. It contains a special reticulated foam filter that traps over 300 grams of dust, salt and moisture. The foam is 97% porous, so it traps dust and other contaminants within the depths of the foam layers, using the whole volume. The filtration system is manufactured from 25% post-consumer recycled materials. During road tests, some taxicabs driving around four US states clocked up 300,000 miles without requiring filter replacement. In service costs, it can save the driver around $150 over the life of the vehicle. Other technical advances include filters with the potential to optimise the air fuel mixture to improve fuel consumption and reduce emissions. While longerlife oil and air filters are dampening aftermarket demand, cabin filters continue to gain popularity, particularly in the US. Another growth area is fuel filters, brought about by the increased demand of diesel cars in Europe. In terms of petrol filters, the trend is toward life-of-car filters fitted inside the tank system. Overall, filter manufacturers are reporting that several factors are driving change in the vehicle filtration sector. In addition to more stringent emissions standards, strong environmental concerns for waste disposal and efforts to increase oil change intervals are high on the agenda. Another factor relates to ways in which the cost of ownership for vehicle fleets can be reduced. But some pressures from customers never change. When asked what the top three criteria a carmaker looks for in a filtration systems supplier, one manufacturer said: “Price, price and price are the top three. Filtration performance requirements are relatively stable. Engine technologies such as variable valve timing and variable compression may drive the oil system flow rates up from -3 gpm to upwards of 13 gpm. E-auctions are [also] having an impact [on us] as well as the move towards systems integration.”

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Chapter 1 Introduction

Report coverage Continuing its series of component market studies, this just-auto.com report reviews the key market drivers for vehicle OE filtration systems, including air, oil, fuel and cabin air filters. Chapter two sets out our view of the market trends, identifying some market shares for OE filter manufacturers in Europe, North America and globally. Chapter three provides brief profiles of the major manufacturers, including ArvinMeritor, Denso, Fram, Mahle, Mann & Hummel and Sogefi.

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Chapter 3 Manufacturers

Chapter 2 The market Product definitions and trends - Air filters Air is vital to a vehicle’s engine. It is mixed with fuel, ignited and with the resulting controlled explosion provides power to the vehicle. It takes between 2,400 to 2,650 litres of air for each litre of fuel. The only way for air to enter the engine is through the air intake after passing through the air filter. The role of the air filter is to prevent impurities from the air penetrating the engine whilst allowing high volumes of air to pass through. If the air filter is clogged up, engine performance is reduced, engine power decreases and engine wear is increased. Improved air filtration units are gradually appearing in both mid- and entry-level models. Developing technologies include the possibility of self-cleaning regenerative filters that would not require changing. In the late 1960s, Mann & Hummel became the first manufacturer to invest in plastic housings for air filters. Plastic is more flexible than steel in terms of both shaping and silencing capability. It is also lighter. Since then, almost every manufacturer has switched to plastic. Environmental considerations are high on the agenda in this segment. Complex, efficiency-improving intake systems are now popular replacements for conventional air filters. Such filters are designed to optimise air-fuel mixture, reduce fuel consumption, exhaust gas emissions and engine noise. Space under the bonnet is also at a premium. As the installation space available in the engine compartment becomes more and more restricted, filters must provide even greater filtration in a tighter space. Geometrically irregular shapes are becoming more common place for air filters. Mann & Hummel’s Micrograde N is a fleece-based filter medium. The company claims that by using this new fleece technology instead of paper filters, up to 50% dust capacity can be achieved. The filter will also last twice as long. The compact fleece filter element (with the same performance as a comparable paper filter) requires 35% less space. The shape of the filter can also be varied. The new Audi A8 is the first car to feature this new filter medium.

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Chapter 3 Manufacturers

Manufacturers have also been working on extending the service life of filter papers, and therefore the interval between filter changes.

Oil filters The possibility of dirt entering the engine represents the biggest threat to vehicles. Engine oil is designed to clean, cool, lubricate and seal the metal surfaces of an engine. The oil filter’s role, which goes hand-in-hand with the performance of lubricating oils, is to remove dirt continuously from the engine oil, providing maximum safety and protection. An oil filter becomes clogged or blocked throughout its use. As a result, dirty oil is dumped back into the engine accelerating engine wear (overheating and corroding certain engine parts) thus shortening the service life. Carrying out an oil change without changing the filter allows as much as a full litre of old oil to flow back into the engine. The development goals in the design of oil filters include an increased separation rate, longer service intervals, less structural space, ease of maintenance, environmental-friendliness and the reduction of parts and maintenance costs. Europe is moving away from the conventional spin-on aluminium canister oil filters to a filter housing that bolts onto the engine with an exchangeable filter element and incorporates other metal-free elements. Mann & Hummel has provided a European vehicle maker with the first composite oil filter module, a solution that saves weight, wastes less oil and is easier to assemble than traditional solutions. European manufacturers are gradually moving away from the old, screw-on aluminium canister oil filter and are replacing it with a module that bolts on to the engine and incorporates other components such as oilpressure sensors. Mann & Hummel had previously used aluminium for the housing of its bolt-on modules, but says the new plastic solution reduces weight by 20%. It also uses a simple paper filter, which holds only 0.003 litres of waste oil when removed, compared to the 0.2 litre usually held inside a canister filter. The new design also includes crankcase ventilation, an oil cooler, oil-pressure sensor and pressure regulator valve. Individually, these components usually require no less than 11 screws to attach them to the engine.

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Chapter 3 Manufacturers

Environmental considerations are the driver behind a number of new oil filter concepts that incorporate metal- and residue-free combustible filter elements. These allow simple and inexpensive recycling. They are also said to be an important step toward reducing car pollution. Oil filters are becoming more durable, too. In the 1970s, the interval between oil filter changes for petrol engines was around 5,000 miles. By 1980, that figure had risen to around 10,000 miles and doubled again to 20,000 by 2000. By 2005, manufacturers expect the average to climb to 30,000 miles, contributing toward a general decline in aftermarket demand for oil filters.

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