Borg Warner Shares on the Move; Co. Said Expecting $2.9B of Net New Business for 2014-2016
BorgWarner Inc. (NYSE: BWA) today announced $2.9 billion of expected net new powertrain business for 2014 through 2016, up 26% from the previous three-year net new business. Demand for the company's advanced powertrain technologies, such as gasoline and diesel turbochargers, all-wheel drive systems, engine timing systems including variable cam timing devices, and emissions products, is expected to continue to drive strong growth.
BorgWarner is a leading provider of highly engineered engine and drivetrain components and systems that help improve fuel efficiency, emissions and vehicle performance. The company's new business is sourced around the globe and includes programs with nearly every major automaker in the world.
"Improving fuel economy, lowering emissions and enhancing the driving experience are increasingly important strategic initiatives for automakers around the world," said James R. Verrier, President and Chief Executive Officer. "BorgWarner is uniquely positioned among vehicle suppliers to deliver powertrain technologies that help automakers meet these objectives. We believe our fuel-efficient technologies will be in high demand as the industry continues to implement advanced powertrain strategies."
Of the total new business, approximately 80% is anticipated from engine-related products such as turbochargers, ignition systems, emissions products, engine timing systems including variable cam timing devices and thermal systems. The remaining approximate 20% is expected from drivetrain-related products including all-wheel drive systems and the company's fuel-efficient DualTronic^® transmission technology and its traditional automatic transmission products.
Turbochargers account for about 50% of the company's net new business, with growth in the commercial vehicle, diesel passenger car and gasoline passenger car markets. Turbocharging is a key strategy employed by vehicle manufacturers to address the issues of fuel efficiency and emissions reduction while maintaining vehicle performance. Turbochargers produced for light and commercial vehicle OEMs is expected to grow nearly 50% over the next five years, from approximately 31 million units produced in 2013 to approximately 46 million in 2018.
Another 7% of the new business is tied to the company's dual-clutch technology. The technology provides the fuel-efficiency and fun-to-drive characteristics of a manual transmission with the convenience and smooth shifting of an automatic. The number of dual-clutch transmissions produced is expected to more than double over the next five years to over 9 million units by 2018.
The company's forecast for the U.S. Dollar to Euro exchange rate for new business over the three-year period is $1.31, up from $1.25 for its previous three-year net new business. However, the company expects most other foreign currencies to be weaker for new business over the three-year period compared with the previous three-year net new business, which more than offsets the anticipated impact of a stronger Euro.
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