) expects to generate about $2.9 billion worth of net new
powertrain business between 2014 and 2016. This represents a 26%
upswing from the previous three-year net new business.
Engine-related products and drivetrain-related products are
expected to contribute 80% and 20%, respectively, to BorgWarner's
new business. Engine-related products include turbochargers,
ignition systems, emissions products, engine timing systems
including variable cam timing devices and thermal systems, while
drivetrain-related products comprise all-wheel drive systems,
fuel-efficient DualTronic transmission technology and traditional
automatic transmission products.
The contribution of new business from Europe is projected to
decline to 27% of the total new business, compared with 30% in
the last three years. Increased demand for BorgWarner's advanced
powertrain technology from other parts of the world is expected
to result in the decline.
Asia is expected to generate 47% of the new business by 2016,
with China alone contributing 32%. Meanwhile, the Americas should
drive 26% of BorgWarner's new business in the next three years.
Of this, 19% is expected to come from North American domestic
original equipment manufacturers (OEMs), up from 11% in the
previous three years.
The commercial vehicle market is projected to have a 13%
contribution in the expected new business over the next three
years. Product-wise, BorgWarner expects 50% of the new business
from turbochargers and 7% from its dual-clutch technology. The
demand for turbochargers is rising on increasing demand for fuel
efficient and low emission vehicles. The production of
turbochargers light and commercial vehicle OEMs is expected to
surge 50% to 46 million units in 2018 from 31 million in 2013.
Meanwhile, the production of dual-clutch transmissions is
expected to double over the next five years to 9 million units by
BorgWarner expects the U.S. Dollar to Euro exchange rate for
the three-year period to be about $1.31, compared with $1.25 in
the previous three-year period.
BorgWarner currently retains a Zacks Rank #2 (Buy). The
company's largest customers include
Ford Motor Co.
Honda Motor Co.
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