BorgWarner sees $2.3 billion in new sales from 2013-2015
DETROIT (Reuters) - BorgWarner Inc (BWA.N) will attract $2.3 billion in new business from 2013 to 2015 as automakers around the world rely more heavily on turbochargers and other fuel-saving technologies to meet stricter gas mileage and emissions requirements.
About half those sales will come from Asia, which accounted for 35 percent of BorgWarner's new business from 2010 to 2012, the U.S. auto parts supplier said on Tuesday. China, the world's largest auto market, will make up about one-third of new sales.
As BorgWarner ramps up in Asia, it will reduce its exposure in Europe, which now makes up more than half its annual revenue.
Europe will be 30 percent of BorgWarner's new business over this three-year period, down from 45 percent from 2010 to 2012. Twenty percent of new business will be drawn from North America.
"Europe remains a leader in the adoption of new powertrain technology, however the general economic slowdown in the region has reset volume expectations in that market," Chief Executive Officer Timothy Manganello said in a statement.
BorgWarner cut its annual profit and revenue outlook last month due to Europe's downturn. Analysts expect the supplier to generate just over $7 billion in revenue this year, according to Thomson Reuters I/B/E/S.
The supplier said Tuesday it expects the U.S. dollar to euro exchange rate will be $1.25 from 2013 to 2015, down from $1.35 over the last three years.
More stringent fuel economy and emissions standards are spurring worldwide demand for BorgWarner's products, including turbochargers and dual-clutch transmissions.
For example, U.S. government standards mandate that by 2025, automakers must show corporate average fuel economy (CAFE) of 54.5 miles per gallon, or about 39 miles per gallon in real world driving. Average fuel economy in 2011 models was 22.8 mpg.
Electric vehicles and plug-in hybrids will be important for automakers to meet stricter targets, but the industry is also relying heavily on technologies that help wring out more miles per gallon in traditional internal combustion engines.
The U.S. Department of Energy estimated that turbochargers, which are fans that generate extra power by forcing more compressed air into an engine's cylinders, can improve fuel efficiency by 7.5 percent.
BorgWarner has said its dual-clutch transmission can deliver a 13 percent fuel efficiency improvement. The market for these transmissions will more than double over the next five years to 9 million, BorgWarner said, adding that global turbocharger sales will jump 50 percent by 2017 to 50 million units.
(Reporting By Deepa Seetharaman)