These customers are typically in the luxury-car segment, where end consumers are willing to pay more in return for a more environmentally friendly product. This is even true for brands not exported to Europe, he says.

"Some companies do have that mid-term and long-term view. They think, 'It's Euro 4 now, but with the pace of change we see in China, especially in big cities, the government may put in place some legislation before the countryside does. So we'll aim for Euro 5 or even Euro 6," he says.

To change a power train from Euro 4 to Euro 5 standards technically would require changing about 20 to 25 percent of the vehicle's engine parts. But the difference of emission level between the two standards could be more than 50 percent, and sometimes 90 percent, Warth says.

Warth says that Mahle Powertrain's technology can help all sorts of vehicles, including low-emitting hybrid and electric vehicles that the Chinese government strongly supports.

Although China's electric vehicle market is at an early stage of development, Warth speaks about it positively.

"I see China's electric vehicle market developing at a very fast pace, and I see it potentially becoming bigger than Europe or North America."

But he says one big challenge for the sector is the lack of infrastructure, which refers to the availability of charging points and the availability of roads suitable for electric cars to drive on.

"When I travel around China I can see that only a few cities have the potential to develop infrastructure to support electric vehicles within the next couple of years. As soon as I go to more rural areas, the infrastructure for electric vehicle is just not there yet. Some roads are not even using tarmac," Warth says.

He believes this challenge can best be tackled by the Chinese government investing in infrastructure.

"I strongly believe that government investment is the only way to accelerate the development of electric cars. If you leave it to businesses that'll slow everything down, because businesses would only invest if they see profits."

Western countries face the same challenge.

"The grid is built up quickly in countries where the government is investing heavily, but the majority of Western countries are not doing well due to a limited investment into infrastructure," Warth says.

One country that has an excellent market for electric vehicles is Denmark, which was achieved through extensive government investment. The German and British governments have followed suit in more recent years, he says.

Denmark's government-owned power company Dong Energy has partnered with a Californian company, Better Place, in a 103-million-euro project to build a nationwide grid to support electric cars. In December 17 last year battery charging stations were fully operational, enabling Danish customers to drive anywhere in the country in an electric car.

The government offers a minimum $40,000 (30,660 euros) tax break on each new electric car, and free parking in downtown Copenhagen.

Warth says that he can see the potential for the Chinese government to introduce similar policies to support its electric car sector. "China has great potential to do well for electric vehicles, because the Chinese government is very efficient in infrastructure investment," he says.

To satisfy increasing specialized customer power-train demand in China, Mahle Powertrain increased the number of its engineers in China to 20 last year; it had 15 the year before.

Also last year, the team moved into an expanded R&D plant in Shanghai built by its parent company Mahle.

Since entering China in 2005, Mahle has established a large presence nationally, supplying components and systems for internal combustion engines to Chinese automotive companies, including pistons, bearings, valves, air, oil, fuel filter modules and other components.

The expanded research and development center has taken Mahle's number of employees from 230 to about 450.

Warth is highly optimistic about the company's future in China's fast-growing automotive sector.

"China's automotive sector is expected to grow at a speed above the rest of the world, and there will be demand for new technologies to comply with new regulations," he says.

"That's where we can help."

Contact the writers at cecily.liu@chinadaily.com.cn and zhangchunyan@chinadaily.com.cn

(China Daily 03/01/2013 page19)