BorgWarner, a leading supplier of original equipment parts, holds numerous patented technologies in critical automotive systems such as engine cooling, turbocharging, timing, and drivetrain. As a global leader in these areas, the company generates annual sales of approximately $3 to $4 billion. With a long-standing presence in China’s automotive industry, BorgWarner has maintained a low-profile approach. However, as China's auto market continues to grow and diversify, the company's involvement is becoming more significant, and its technological expertise is increasingly recognized.
On December 20th, during the final days of the year, our reporter had an exclusive interview with Shen Hui, President of BorgWarner China.
**China Industry News:** This year, the Chinese auto market has seen slower growth, and many automakers are experiencing declining profitability. Does this affect your confidence in continuing to invest in the Chinese auto parts industry?
**Shen Hui:** We have not changed our strategy. We continue to follow our original plan.
First, we serve a wide range of customers across different segments—passenger cars, trucks, and buses. We currently have over 50 customers in China, which helps us manage risk effectively. Last year, we established a regional headquarters in Shanghai, centralizing finance, HR, procurement, IT, and market operations. In China, BorgWarner operates four factories: one in Beijing, one in Shanghai, and two in Ningbo. These facilities produce engine and transmission components. For example, Warner Shenglong Ningbo Co., Ltd. specializes in engine cooling systems and water pumps, while another Ningbo plant focuses on turbochargers for both passenger and commercial vehicles. In Beijing, a joint venture with BAIC produces powertrain systems, with BorgWarner holding 80% ownership. In Shanghai, we operate a joint venture called NSK, which produces friction plates for automatic transmissions.
Second, although the global automotive market, including North America, has not been very strong this year, the Chinese market has shown steady growth over the past two years. Our overall assessment of the Chinese market remains positive, and we are committed to it. The current lower profits for domestic automakers are mainly due to the high-profit period of previous years. In reality, their current performance is still above the international average. Many people feel that the car market is not doing well this year because they're comparing it to the earlier boom. But for BorgWarner, we follow our customers wherever they grow, and we remain dedicated to supporting them long-term. Our investment and technology transfer plans in China have not changed.
**China Industry News:** With intense competition in the Chinese auto market, dominated by major foreign manufacturers, how does BorgWarner maintain its competitive edge? What core technologies can it offer to China's auto parts industry?
**Shen Hui:** The integration of parts suppliers is definitely a trend. But why are we successful? First, it's based on innovation. Our products are high-tech components for powertrains, which help us capture a large market share. For instance, we are the second-largest in turbocharger sales globally, and the largest in four-wheel drive system components. That’s our technical advantage. Second, we focus on cost reduction through localization. Our localization strategy goes beyond just manufacturing. We source 50–60% of raw materials locally, develop local suppliers, and hire most of our management from within China. Some equipment is also sourced locally, helping us reduce costs significantly.
BorgWarner strongly supports China’s energy-saving and environmental protection policies. We provide technical support in areas like cold start technology, turbocharging, emission control thermal management, and dual-clutch systems. These technologies help vehicles meet national environmental and fuel efficiency standards and support the development of hybrid technologies.
**China Industry News:** As the president of a world-class auto parts company in China, what advice do you have for the independent development of China’s auto industry?
**Shen Hui:** The current focus on self-development in the domestic auto industry is a positive trend. However, from a global perspective, true self-development should focus more on parts and components rather than just the整车 (complete vehicle). This is more crucial than developing entire vehicles. Domestic companies are relatively weak in this area, often focusing on OEMs without sufficient attention to parts suppliers. From a foreign perspective, vehicle manufacturing involves only four main processes, and key components and technologies are developed by parts suppliers. But now, the industry and media are overly focused on the self-development of整车 plants. This leads to higher production costs. Why? If a整车 manufacturer develops advanced technology but faces limited market demand, the cost will be passed on to the end customer. Also, a car has tens of thousands of parts, so it's impossible for the整车 plant to develop each one individually. Therefore, real self-development must be about the independent development of parts and components.
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