Competitors are lining up to claim their share of the booming European diesel particulate filter market.
Though France's Faurecia is Europe's leading supplier of the filters, rivals such as Germany's Robert Bosch, Tenneco Automotive of the US and Japan's Denso are hoping to catch up fast.
At stake is a part of one of the fastest-growing sectors in the auto industry. According to a recent study by German research firm B&D Forecast, the European market will grow to E663 million by 2006 from E100 million this year. By 2012, it could be worth E1.9 billion.
Faurecia currently controls 60 percent of the market and provides filters to most major European automakers. It will remain the leader in the field for a while, said Ferdinand Dudenhöffer, head of B&D Forecast, because it is the only supplier with the capacity to meet the current demand. Last year, Faurecia produced 170,000 particulate filters. This year, it will make about 440,000 units.
Robert Bosch is keen to join the action. The German supplier will begin making particulate filters next year. It has invested E200 million in initial development and production. Bosch expects to produce 1 million units a year by 2008.
Other suppliers are already producing particulate filters.
Germany's Eberspächer supplies the filter on the current VW Passat 2.0 TDI.
Tenneco, a US-based company that builds particulate filters in Germany, is the second-largest supplier of filters to PSA after Faurecia.
Tenneco says it will make almost 300,000 filters for the French automaker this year.
"We have almost a 50-50 share of PSA business and it's growing," said Frank Terres, department manager for the development of particulate filters at Tenneco.
Terres said the company's filter production will double to 600,000 annually by 2006. Tenneco has six different development projects underway with, among others, Peugeot, DaimlerChrysler and Audi, he said.
VW is making its own soot filters at a plant in Kassel, Germany. These in-house filters will be used in the Golf lower-medium car starting in December and on the Touran medium minivan in the spring. VW will determine in the future whether it remains cost-effective to build its own soot filters or simply purchase filters from suppliers.
Growth in the particulate filter market may be slowed temporarily by materials and capacity shortages.
BMW believes that suppliers will only be able to meet about 30 percent of German demand and will not reach full capacity until 2007.
One supply bottleneck could be the substrates, where particulates are trapped and burned. There are only two major substrate makers: Japan's Ibiden and NGK Insulators.
"The expected shortage comes from the fact we have had such short notice from carmakers," said Atsushi Matsuda, director of business strategy for NGK Europe. He noted that particulate filters have only recently become "a hot issue" and said it can take up to two years to start commercial production.
Ibiden, the largest producer of filter substrates, is planning a new manufacturing plant in eastern Europe for 2006 to meet growing demand. The company produced about 500,000 substrates in Europe at its subsidiary Ibiden DPF France in Courtenay.