Supplier Predicts Huge Growth for EPS

Japan's highest-volume manufacturer of electric power steering systems is projecting more than 60% growth in global EPS demand over the next three years. JTEKT Corp., a new Toyota Motor Corp. supplier comprising the former Koyo Seiko Co. Ltd. and Toyoda Machine Works Ltd., is forecasting global EPS demand of nearly 30 million units in 2008, up from an estimated 18 million last year. The total, if

Japan's highest-volume manufacturer of electric power steering systems is projecting more than 60% growth in global EPS demand over the next three years.

JTEKT Corp., a new Toyota Motor Corp. supplier comprising the former Koyo Seiko Co. Ltd. and Toyoda Machine Works Ltd., is forecasting global EPS demand of nearly 30 million units in 2008, up from an estimated 18 million last year.

The total, if achieved, would represent more than 35% of global steering-system demand, which JTEKT expects to grow to 77 million units in three years, a gain from 65 million in 2005.

Included in the EPS forecast: 24 million pure EPS units (up 80%) and 4.4 million electrically controlled hydraulic types — electrohydraulic, or EHPS, systems.

Fully electric power steering improves fuel economy, reduces emissions and often saves valuable underhood space when compared with the engine-driven conventional hydraulic power steering systems, whose basic design dates to the 1920s and became commercially available in the early 1950s.

Toshikatsu Taniguchi, senior executive director-steering system research and development, says volume growth will be greatest in Europe where EPS demand, including EHPS types, will increase by nearly 5 million units to 15.5 million.

In 2005, sales in Europe grew to 10.7 million units and 51% of demand, a 5% increase over prior-year's level and up from 13% in 2000. Conventional hydraulic power steering (HPS) accounted for the lion's share of the remainder, at 9.6 million, with manual (non-assisted steering) falling to less than 3%.

Taniguchi projects 2008 EPS/EHPS sales in Japan and North America of 7.2 million and 4.8 million units, an increase of nearly 70% and 100%, respectively. Included: 6.8 million EPS in Japan and 3.7 million in North America.

By 2008, JTEKT says, electric power steering will be installed in seven out of 10 vehicles produced in Japan and Europe. The penetration rate in North America will be slightly less, at one in four vehicles.

JTEKT data does not suggest a similar shift to electric power steering in the world's emerging markets — including China, India, Southeast Asia and Latin America — where hydraulic steering systems continue to dominate.

In Japan, conventional hydraulic systems still accounted for two-thirds of steering systems sold in fiscal 2004 (ended March 31, 2005), down from more than 80% three years before, according to a study by IRC Inc., a Nagoya-based market research company.

Global Steering System Market & Forecast
(in millions of units)
2000 2005 2006 2007 2008
EPS 2.6 13.5 17.6 21.1 24.3
EHPS 1.3 4.2 4.1 4.2 4.4
HPS 49.0 44.8 43.9 44.6 45.2
Manual 7.9 3.0 2.9 2.9 3.0
Total 60.8 65.5 68.5 72.8 76.9
Source: JTEKT
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