Foreign OEMs rely on China

“Localized operations will provide enterprises with greater flexibility and development space.” On November 28, 2012, Pan Yuesheng , president of BorgWarner China, the global giant of engine and transmission system production, said at the opening of the Ningbo Engineering Center. .

BorgWarner Ningbo Engineering Center will equip BorgWarner engine products such as turbocharger, engine timing chain, EGR exhaust, and Belu ignition coil with test equipment to accelerate the application, testing, and verification of BorgWarner engine products in China. test.

The expansion of international component giants in the Chinese market is accelerating. On November 30, 2012, Bosch also opened its second production base in China in the National Hi-tech Industrial Development Zone of Qingdao. In the first half of 2012, it also cooperated with Bosch. Chery has established a car electronics joint venture; another European parts giant Valeo has already established 22 factories in China.

The multi-faceted localization of international component giants has boosted the quality of their own brands. According to the 2012 China Automotive Performance, Operations and Design Research (SMEI) report released by JD Power Asia Pacific on November 30, 2012, the self-owned brand significantly narrowed the gap between automobile brands and international brands in the past year. In particular, the progress in driving performance and engine and transmission systems deserves attention.

The international component giants expanding in the Chinese market have a clear tendency to rely more and more on the Chinese market. According to Mr. Tim Manganello, chairman and chief executive of BorgWarner, 55% of the business of BorgWarner came from Europe. In recent years, due to the European debt crisis, the European business fell by about 8% last year alone.

The Chinese market has another scene. “Despite the downturn in China’s commercial vehicle market, which led to a decline in this sector, overall sales still maintained high growth. This year, BorgWarner will achieve record sales in China,” said Tan Yuesheng.

Last year, BorgWarner's annual sales in China reached US$500 million, which was jointly completed by four subsidiaries in Dalian, Beijing, Shanghai and Ningbo. “Ningbo Company is the first wholly-owned company established by BorgWarner in China, and it quickly becomes the center of China's business,” says Mr. Tim Manganello.

Borgwarner said that in the next few years, it will substantially increase investment in the Chinese market. Tan Yuesheng said: “Although the overall auto market in China has entered a period of slow growth in the past two years, BorgWarner firmly believes that China has a huge market and expects BorgWarner to The business in China will achieve an annual growth of 28% in the next five years."

Localization preferences

In fact, BorgWarner's growth in the Chinese market in the first eight months of 2012 was only 20% year-on-year. Tan Yuesheng's expectations for the future are much higher than the current growth. Its foundation is based on the training strategy of BorgWarner's localization in the Chinese market. .

In October 2011, BorgWarner signed a strategic cooperation agreement with Great Wall Motor, which provided components for Great Wall Motor Co., Ltd. from the beginning of the transfer to the engine and transmission fields. "Now our cooperation with the Great Wall has already involved all of BorgWarner's products." Tan Yuesheng said.

This all-round cooperation comes from the initial low-profile cultivation of BorgWarner. When Mr. Yue Yuesheng arrived in China in 2003, many domestic auto companies, including Great Wall Motors, made four-wheel drive models and SUVs. The volume was very small, and almost no multinational company was willing to support it.

“Because there are many local auto companies that only have one or two thousand or even a few hundred units a year, the volume is too small. However, BorgWarner is now entering the product and production investment period, and then gradually follow the market development to occupy the market share. Now, BorgWarner's rear-wheel drive SUV wind motive has a market share of at least 90% in the Chinese market, said Tan Yuesheng.

With the rapid growth of China's own-brand vehicles, the market obtained by this method does not apply in certain areas, because Chinese auto companies prefer to obtain international advanced technology products and participate in technical discussions.

Wei Jianjun, chairman of Great Wall Motor Co., once made a straightforward request, “Great Wall Motors will focus on improving the quality of SUV/pickup trucks, crossover passenger cars, and A-class cars. The power system is the key to the improvement of car quality. It is hoped that BorgWarner will apply the world's most advanced power transmission technology to Great Wall Motors."

Mr. Yao Yuesheng knew the needs of self-owned car makers and began to expand the technology locally. The BorgWarner Ningbo Engineering Center, which opened on November 28, aims to enhance BorgWarner's indigenous R&D efforts and accelerate the localization of BorgWarner's engine products.

Local car companies are not content to just buy BorgWarner products. After being aware of this situation, BorgWarner began cooperation with 12 of China's leading automakers this year and engaged in a DCT dual-clutch automatic transmission key module, control module, and clutch module project at the Dalian plant, specifically for Chinese vehicles. To develop high-end DCT products.

BorgWarner even tried to participate in some of the arguments for the development direction of the Chinese automotive industry. The National Development and Reform Commission organized a number of domestic enterprises to conduct research on advanced automatic transmission technology. He said that he hopes that the relevant state departments will explicitly list the wet DCT as a preferred item for the Chinese automatic transmission.

This deeper localization cooperation has promoted the improvement of the product quality of auto brands. JDPower Asia Pacific has released a report on the performance, operation and design of Chinese cars on November 30. The report said that in 2012, the average score of the self-owned brand glamour index was 781 points, which was a record high for independent brands.

According to the report, the self-owned brands have made significant progress in audio/entertainment equipment/navigation systems and seats, which has increased by 11 points compared to last year. Improvements were also made in driving performance and engine/transmission systems, which increased by 7 points compared to last year. International brands declined due to the appearance of the body, as well as the decrease in the satisfaction of goods and space.

BorgWarner currently provides support for SAIC, FAW, Great Wall, BAIC, Weichai, Chery, Geely, Guangzhou Automobile, CNHTC, Chang'an, BYD, and JAC. Mei Songlin, vice president of JDPower Asia Pacific China, believes that if a new car considers local consumer preferences when selecting parts and components in the R&D phase, it will be able to win the favor of Chinese consumers.

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