A joint venture with Volkswagen makes Siemens VDO the first serious challenger to Robert Bosch's domination of the diesel injector market.
VW and Siemens VDO last week created a joint venture, VW Mechatronic GmbH & Co. KG, that will produce a new generation of high-pressure pump injectors for diesel engines starting in late 2004. Initial investment will be E270 million.
VW will build a plant at Stollberg in eastern Germany. Siemens VDO will develop the product and processes.
As a pioneer in common-rail technology, by 2000 Bosch controlled 80 percent of the market for high-pressure diesel injectors. Siemens VDO was a distant second, with a 7 to 8 percent share.
But Siemens VDO says it will produce 4 million common-rail injector systems for Ford, Renault and PSA by year end, about a 15 percent share, before the new VW deal even starts.
The joint venture helps both Siemens VDO and Volkswagen. Siemens VDO lands Europe's No. 1 car group as a customer. VW gets a second supplier besides Bosch, although VW said it would keep buying from Bosch.
Both gain a promising new technology. The joint venture's injectors are an advance on VW's unique system of using individual injector pumps at each cylinder. The new pumps will use piezo controls for even more precise control of injections, for improved economy and lower exhaust emissions.
VW Mechatronic expects to build 2 million injectors annually by 2005 and 4 million by 2007.