BorgWarner, a leading supplier of original equipment parts, holds numerous patented technologies in key automotive systems such as engine cooling, turbocharging, timing, and drivetrain. As a global leader in these fields, 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 the Chinese auto market becomes more competitive and diverse, its involvement in the sector has grown significantly. The irreplaceable value of its advanced technologies is becoming increasingly apparent.
On December 20th, during the late afternoon 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 experienced slower growth, and the economic efficiency of many automakers has declined compared to the same period last year. Does this affect your confidence in continuing to invest in China’s auto parts industry?
**Shen Hui:** We remain committed to our strategy and have not deviated from our original plan. Our customer base spans multiple market segments, including passenger cars, trucks, and buses. With over 50 customers in China, we maintain a low operational risk and high success rate.
Last year, BorgWarner established its regional headquarters in Shanghai, centralizing finance, HR, procurement, IT, and marketing operations in China. Currently, the company operates four factories across the country: 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 produces powertrain components, particularly smart torque systems, with BorgWarner holding an 80% stake. In Shanghai, the NSK joint venture manufactures friction plates for automatic transmissions.
**China Industry News:** The current competition in the Chinese auto market is dominated by major foreign manufacturers, and the parts industry is no exception. What are BorgWarner’s advantages in capturing the market? What core technologies can it offer to China’s automotive components industry?
**Shen Hui:** The integration of parts suppliers is indeed a growing trend. But why has BorgWarner succeeded? First, it is based on innovation. Our products are high-tech components of powertrains, which allow us to capture a significant market share. For instance, we are the second-largest seller of turbochargers globally, and we lead the world in the sale of four-wheel drive system components.
Additionally, we focus on localization to reduce costs. Our local production goes beyond just manufacturing — it includes local talent, raw materials, and equipment. Approximately 50-60% of our raw materials are sourced locally, helping us develop strong supplier relationships. Most of our management staff are also local employees, and we have started sourcing some equipment from Chinese manufacturers, further reducing costs.
We strongly support China’s energy-saving and environmental protection policies in the automotive sector. Technologies like cold start systems, turbocharging, thermal management for emissions control, and dual-clutch systems help vehicles meet national environmental standards and support the development of hybrid technology.
**China Industry News:** As the president of a globally recognized parts supplier in China, what advice do you have for the independent development of China’s auto industry?
**Shen Hui:** The push for self-development in the domestic auto industry is a positive trend. However, from a global perspective, true self-development should focus more on the independent development of parts and components rather than just the整车 (whole vehicle). This is even more critical than developing entire vehicles. Many domestic companies are weak in this area, often focusing only on OEMs and neglecting the importance of parts suppliers.
From a foreign perspective, car manufacturing involves only four major processes, with the development of key components and core technologies handled by parts manufacturers. However, currently, much of the attention and media coverage is focused on the self-development of整车 manufacturers. This leads to higher production costs, as it’s impractical for a single manufacturer to develop all 10,000+ components on a car. Therefore, true self-development must be about developing the parts and components industry itself.
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