Fuel Efficiencies - A Supplier Perspective June 4th, 2009
Outline BorgWarner Overview Fuel Efficiencies Summary 2
The BorgWarner Strategic Difference Technology Leadership Drives Growth Customer and Geographic Diversity Cost Focus Financial Strength and Discipline 3
BorgWarner at a Glance 2008 Sales: $5.3 Billion ($6.0B with NSK-Warner) Employees: 14,000 Operations: Products: 60 Locations 18 Countries Engine, Transmission and AWD systems Market Drivers: Fuel Economy Emissions Performance 4
BorgWarner = Powertrain Innovation Thermal Systems Thermal Management Components and Systems Visctronic Systems Fans / Fan Drives Oil Pumps Engine 74% /sales Chain Systems Engine Valve Timing Systems Timing Chain Variable Cam Timing HY-VO Transmission Chain Transmission Systems DualTronic Clutch Modules DualTronic Control Modules Solenoids / Solenoid Modules One-way Clutches Friction Plates Transmission Bands Drivetrain 26% /sales Emissions Systems Emission Controls Secondary Air Systems Actuators Turbochargers Wastegate Variable Turbine Geometry (VTG) Regulated 2-stage (R2S ) Beru Technologies Diesel Cold Start Technology Electronic & Sensor Technology Gas Ignition Technology TorqTransfer Systems AWD Systems 4WD Transfer Cases Synchronizer Rings Electronic Control Units 5
Customer and Geographic Diversity 2009 Sales Outlook * VW/Audi 15% Daimler 6% Renault/ Nissan Fiat BMW Ford GM PSA Other 3% 3% 3% 2% 1% 1% 11% Toyota Hyundai/Kia 3% Honda 2% Renault / Nissan 2% For. OEMs/China 1% Chinese OEMs 1% Other 6% Com. Vehicles 5% Ford 5% US OEMs~12%* Americas ~30%* 32%** Asia ~20%* 13%** Europe ~50%* 55%** GM 5% 4% Chrysler 3% Asian OEMs Aftermarket 2% 2% Commercial Vehicles 10% Other 4% 6 * NSK-Warner included ** NSK-Warner excluded
BorgWarner = Efficient Gasoline Examples - 2010 Ford Fusion, VW Golf, BMW Mini Cooper, Honda Fit Features BorgWarner Transmission Modules, One Way Clutches, Friction plates Turbochargers Cam Torque Actuated VCT Engine Timing Systems, HY-VO Chain Efficient Gasoline Examples 7
BorgWarner = Clean Diesel Example VW Jetta TDI, Mercedes C-Class/ E-Class, BMW 1/3/5 Series, Mazda Atenza Features BorgWarner VTG Turbochargers One Way Clutches, Friction Plates Pressure Sensor Glow Plugs DualTronic Dual Clutch & Control Modules Clean Diesel Examples 8
BorgWarner = Commercial Vehicles Example Medium/Heavy Duty Trucks, Construction/Agricultural Vehicles, and Buses Features BorgWarner Turbochargers egeardrive Fan drives (Cool Logic and Visctronic) and Coolant Pumps Diesel Cold Start & Tire Pressure Monitoring Systems Commercial Examples 9
BorgWarner = Hybrid & Electric Vehicles BorgWarner has broad production experience with current products in hybrid and electric vehicle applications Hybrid and Electric Vehicle Applications (A few examples) Smart ForTwo hybrid BMW Mini Toyota Prius Honda Insight and Civic Ford Escape, Mariner, Tribute, Fusion, Milan GM/Saturn Vue, Aura, Malibu GM Escalade, Tahoe, Yukon Tesla - Roadster Fisker Karma Current Product Coverage Engine Valve Timing System Cabin Heater (High Voltage) HY-VO Chain Engine Valve Timing Components Engine Valve Timing System Transmission Components & HY-VO Chain Transmission Components Tire Pressure Monitoring System & egeardrive Turbocharger 10
Fuel Efficiencies 11
Tightening Fuel Economy Standards Actual and Projected Fuel Economy for Light Vehicles Miles per Gallon Equivalent (CAFE/Local test cycle) 70 60 50 40 30 20 10 0 China Enacted E.U. Enacted U.S. Enacted 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 Year E.U. Proposed Japan Enacted U.S. Proposed 15%-30% more fuel economy Gas and Diesel Turbochargers 5% fuel economy possible Cam Phasers -with CTA Source: International Council on Clean Transportation, January 2009 Technology U.S. Environmental Protection Agency, Notice of Upcoming Joint Rule Making To Establish Vehicle GHG Emissions and CAFÉ Standards, May 22, 2009 Fuel Economy percentages may vary depending on vehicle application, use and data sourced for comparison 5%-15% more fuel economy Dual Clutch Transmissions 12
Global Engine Downsizing Light Vehicle Engines Produced Worldwide 70 60 2 & 3 Cylinder 4 Cylinder 6 Cylinder 8 & 10 Cylinder Millions of Units 50 40 30 20 10 0 4 cylinder engines account for 70% of total engine growth 2009-2014 2006 2007 2008 2009 2010 2011 2012 2013 2014 2 & 3 Cylinder: 7.4M units globally by 2014 4 Cylinder: strong positive trend, dominates market; 59.3M units by 2014 6 Cylinder: growth in units, slight loss of share; 10.1M units by 2014 8 & 10 Cylinder: downtrend; 2.7M units by 2014 Source: CSM Worldwide, Internal BW forecasts (Jan. 2009) 13
Global Light Vehicle Engine Market 76 Million LVs 4.0M 68% Growth 18.5M 50 Million LVs 2.7M 11.0M 270% Growth 11.0M 3.0M 33.3M Alt. Fuel Diesel GDI Gasoline 42.5M 2009 2014 Source: CSM Worldwide, Internal BW forecasts (May 2009) 14
LV Turbocharger Growth by Market Turbos [millions] 25.0 22.5 20.0 17.5 15.0 12.5 10.0 7.5 5.0 Diesel Turbochargers 48% growth China/India/Thailand Japan/Korea Americas Europe 13.1m 19.4m Turbos [millions] 8.0 7.0 6.0 5.0 4.0 3.0 2.0 Gasoline Turbochargers 184% growth China/India/Thailand Japan/Korea Americas Europe 2.5m 7.1m 2.5 1.0 0.0 2007 2008 2009 2010 2011 2012 2013 2014 0.0 2007 2008 2009 2010 2011 2012 2013 2014 *Includes North American light truck applications *OE demand only *R2S is counted as 2 turbos Source: CSM Worldwide, JD Power Internal BW forecasts (May 2009) 15
Automatic Transmissions Advance DCT 0.8M Full HEV 0.4M CVT 2.5M 6/7/8 AT 5.0M 3/4/5 AT 14.5M AMT 0.4M 50 Million LVs 76 Million LVs 22.6 Million ATs 45% ATs DCT 5.0M Full HEV 1.0 CVT 4.5M 6/7/8 AT 15.0M 3/4/5 AT 11.5M AMT 2.0M 39 Million ATs 51% ATs 400+% Growth 200+% Growth 2009 2014 Automated MT 3/4/5 Spd AT 6/7/8 Spd AT Cont. Variable Full Hybrid Dual Clutch Source: CSM Worldwide, Internal BW forecasts (May 2009) 16
Summary Proven Technologies Exist Investment will be Necessary Timing? Technology Neutral Policies are Key Need to use all technologies available 17
Thank You better fuel economy reduced emissions great performance 18