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BorgWarner Inc. (BWA - Analyst Report) announced that it is constructing a new production facility in the industrial zone of Lanheses, Viana do Castelo, Portugal. This new facility will help BorgWarner in fulfilling the rising demand for exhaust gas recirculation (EGR) products used both in passenger cars and commercial diesel vehicles. Thus, the expanded production will further strengthen BorgWarner’s position as the leading supplier of EGR technologies in Europe.

The new facility presently covers 160,000 square feet of manufacturing space and is located about 31 miles or 50 km away from the current site at Valenca. BorgWarner started building the plant last month and expects to complete it by next year.

BorgWarner will be producing EGR coolers, EGR tubes and glow plug control modules at this new facility. These are eco-friendly technologies used in modern engines to reduce emissions. BorgWarner anticipates that the global market for EGR systems will expand to 33.3 million units by 2018 from 21.2 million units in 2013.

BorgWarner will benefit from rising demand for fuel efficiency together with enforcement of new government regulations regarding emissions. With the enforcement of Euro 6 emissions regulations in Europe from 2014, the demand for advanced diesel cold-start technologies should rise, which will further augment the company’s results.

BorgWarner is trying to increase the production of diesel cold-start technologies, which are currently produced at the Valenca plant. This new plant is part of of the strategy for achieving the same. The company plans to shift the production of diesel cold-start technologies from the Valenca plant to Viana do Castelo by 2015.

BorgWarner is a leading manufacturer of powertrain products for major automakers. The company’s products are capable of improving vehicle performance while meeting fuel-efficiency and emission standards. It currently retains a Zacks Rank #2 (Buy).

The company operates in 57 locations in 19 countries. BorgWarner’s products are manufactured and sold worldwide, primarily to original equipment manufacturers of passenger cars, SUVs, trucks and commercial transportation products. The company’s largest customers include Ford Motor Co. (F - Analyst Report), Toyota Motor Corp. (TM - Analyst Report) and Honda Motor Co. (HMC - Analyst Report).

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