China's automotive market is growing so fast that BorgWarner Inc. — a major producer of turbochargers, all-wheel-drive systems and other driveline components — expects annual sales growth of 40 percent there over the next five years.
"We are going to be very aggressive in China," CEO Tim Manganello said here yesterday during the seminars. "China is exploding."
Last year, China generated 6 to 8 percent of BorgWarner's global sales of $3.96 billion, Manganello said.
To meet rising demand, BorgWarner opened a technical center in Shanghai in March and is building a plant in Dalian to produce transmission modules. But the big revenue generators are turbochargers and all-wheel-drive systems.
Domestic Chinese automakers are generating much of BorgWarner's sales growth.
BorgWarner will sell more to domestic Chinese automakers than to foreign automakers' Chinese ventures this year, Manganello said.
"Chinese companies will be the early adopters" of new technology, in part because of their faster time-to-market, Manganello said. That means BorgWarner's latest technology will be on sale first in Chinese vehicles rather than vehicles coming from North America or Europe, he said.
In the North American market, he argued, diesel powertrains ought to play a greater role in the drive to improve fuel economy. Diesel engines generally are 30 percent more fuel efficient than gasoline engines.
Even if automakers reduce the size of gasoline engines and add direct injection and turbochargers, Manganello said, diesels will remain more efficient.