Growth in Europe is slowing down, which has led to America and Asia emerging as two big growth markers. Asia, for BorgWarner, means China and India primarily. If this should explain why BorgWarner is keen to invest more in India, in new facilities, only time will tell. But the fact is, BorgWarner is looking at investing in capital equipments to support the products and programs it has been awarded. “You will see continued investments around technical infrastructure capabilities and production equipment to support growth and new launches, also in terms of new buildings. We will keep investing in India,” said Verrier. He added, “BorgWarner has always grown much faster than the market because of the adoption of products. We have done this for many years and Europe has been a large part of this growth. A lot of the adoption of our products is much more mainstream in Europe.” Similar to the diesel vehicles in the passenger car segment, a high percentage of gasoline vehicles in Europe have turbochargers. With tighter emission and fuel economy standards in Europe, BorgWarner products have been adopted and applied in European products. “Growth will continue to come from Europe, but at a slower pace. Technologies that have been successfully applied in Europe will find their way to Asia (India and China) and prove beneficial to the markets there,” said Verrier.
Technology & innovation
Producing technology for 6-speed, 9-speed and 10-speed transmissions, BorgWarner is keen to drive products to the next level. “A long time ago there were engines with only one turbo. Now there are engines with three or maybe four turbos. In the last year or two, we launched a product in the US market, to work with the transmission. It is used in stop-start technology for automatic transmission, and is termed as stop-start accumulator or a launch solenoid. It helps the transmission function smoothly and benefits the driver when in the stop-start mode,” said Verrier. Also, adding to the Borgwarner line will be products from acquisitions. The company recently acquired Gustav Wahler, which makes thermostats. These will be made in India according to Verrier. “Its going to be around the powertrain – things like thermo-management products, valve train products, air management products, etc. This is also the reason why we spend a lot on R&D,” he added.
BorgWarner buys a lot of components from India and sends them to Europe and North America. From a component supply point of view, this will continue. Verrier said that BorgWarner may source housings for its turbochargers from India. He added, “One of the things that help us a lot is because we have a strong team on the ground in India. They develop local suppliers, to whom we will serve an opportunity to supply parts around the world.” Stressing on local production for local consumption, Verrier mentioned that, for India he would want to do engineering of products, make them locally to serve the Indian market. Derivatives of products in Europe, the products that BorgWarner will launch in India during the next couple of years will see application, engineering, designing, testing and validation at the local level. According to Verrier, conducting core R&D in India is the next step. “We want to walk before we run, but yes over the long haul I think the engineering is outstanding,” he remarked.
Mentioning that they work on everything – from 660 cc engine to 18-litre engines found in heavy commercial vehicles, Verrier stated that they see a strong trend to downsize engines by boosting them. “It is not just turbochargers, we do pretty small engine coolers. We also provide timing drive product for 660 cc engines in Japan,” he said. Interestingly, on a local or a global level, BorgWarner is very clear about offering ideas rather than defining what the engine configuration should be like. The engineers at the local level will be expected to offer optimisation technologies and products. Solutions like variable cam timing, EGR cooler, EGR valve, etc. Said Sudhir Chawla, COO, BorgWarner Emissions Systems India, “Gasoline engine emissions are still far off. The effect of which will be seen few years down the line. When the downsizing of gasoline engine is done. It is at this juncture that turbocharging and EGR cooler will be needed. Borgwarner is ready with products for 2021, and beyond. Especially knowing that BS 5 will come to India in 2021.”
Right technology at the right time
Attention will be on OEMs seeking a certain technology at a certain time. With emission norms becoming stricter and tighter, BorgWarner sees big opportunity. Irrespective of whether it emerges at the passenger car level or at the level of commercial vehicles. Weather it is the off-road segment or the gensets segment, Verrier says that BorgWarner sees a huge potential. Chawla opined that OEMs are setting up a base in India for exports; they will also buy locally developed parts. “It is not only the domestic demand, which is going to bring growth, but also come from OEMs supplying engines, powertrain and vehicles,” he added. A push is also expected at the fuel efficiency level. Demand from end customer for fuel economy will invite regulations according to Verrier. “The game will always be around improving fuel economy without increasing costs. You do get good fuel economy from hybrids, but it is expensive. A variable cam timing phaser or an EGR valve, or a turbocharger, gets one to two per cent better fuel economy, which is huge. The trade-off becomes very interesting and attractive.” Another trend in the merging markets is that once the customer really appreciates a technology to achieve fuel economy benefits, reliance on the supplier goes up. “We are not expected to design their engine completely, but OEMs certainly want us to understand their whole air management system and provide a solution accordingly,” said Verrier.
Growth at BorgWarner will be largely organic in nature. Products in its portfolio will drive the growth that the company expects said Verrier. He added, “There will be some acquisitions along the way, but they will be governed by technology.” Though BorgWarner has been adding plants in Mexico and Eastern Europe, the most growth is expected to come from India and China. Said Verrier, “China is important as it is one of the biggest markets in the world. It is important for us to support our global customers. They need us in China just as they need us in Europe. The growth rate in India is very strong and it will be among the top three markets in the world in next 10 years.” Expecting growth to emerge from passenger vehicles as well as commercial vehicles, Verrier said that manual transmission will account for half the transmission market, the other half will consist of the quick growing dual clutch transmission. Automatics, said Verrier, will move towards more ratios apart from breaking into Continuously Variable Transmission (CVT). “India has an opportunity to move to dual clutch technology. It was a good step for India to move to the first level of automated manuals. We will see a long term shift away from conventional manual to some form of automatics,” he concluded.