Auburn Hills, Michigan based BorgWarner Inc. (BWA), a leading manufacturer of powertrain products for the world’s major automakers, opened a new diesel and gasoline turbocharger facility in Rzeszow , Poland , southeast of Krakow. The facility has a total annual capacity of 500,000 diesel and gasoline turbochargers and will cater to automakers primarily in Europe.
The company’s new plant has commenced production within a year of beginning the facility’s construction in March 2008. This is BorgWarner’s 24th facility in Europe.
Europe is already a key market for BorgWarner’s turbochargers. The company is one of the six major suppliers of turbochargers in North America and Europe, with a 25% market share. Turbochargers are used in 41% of the cars in Europe.
BorgWarner expects strong diesel engine growth from 16 million units in 2007 to 20 million units in 2013. Sustained demand for the company’s diesel turbochargers in Europe is boosting sales in this region. The company would invest about $125 million to increase its global passenger car turbocharger capacity by more than 3 million units over the next few years.
Additionally, BorgWarner looks to capitalize on growth opportunities in Asia , where awareness of emission standards is on the rise. India and China are expected to account for 50% of the growth in the turbocharger business in the next 10 years, and BorgWarner ranks second in both markets. We have a Hold rating on the stock with a six-month target price of $32.00.
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