Automotive News Europe - November 2019 - 21

AUTOMOTIVE NEWS EUROPE

Q&A

Supplier TALK FROM THE TOP

rate [the global percentage of cars with
BorgWarner content] and our content
per vehicle. Looking at internal combustion, our participation rate is expected
to rise to 52 percent in 2023 from
47 percent now, and the average content per vehicle to $210 from $187. In
hybrids, where production is increasing
sharply, we expect our participation rate
to go from 25 percent to 46 percent,
and content per vehicle to go from $147
to $275. In electric, we will move from
13 percent to 33 percent, and the content per vehicle will be $340 -- even
higher than hybrid or combustion.
Why is your content per vehicle highest in electric?
It's simply because we are moving up
the food chain. What we sell for electric vehicles has more value-added.
Many people associate electrification
of the powertrain with full-electric vehicles, but this isn't really the case. The
battery-electric vehicle will coexist with
a vast variety of other propulsion architectures, with motors that can be used
for hybrids as well as full-electric vehi-

cles. It's really important for our growth
to make sure we are considering all of
the electrification possibilities and that
we have a modular design, which will
give us scale.
Is BorgWarner negatively affected by
current trade disputes?
Relative to our peer group, we think we
are in a slightly better position because
we manufacture our finished products in
the same region where our customers
use them, so we are not shipping them
from one continent to another. Where
trade disputes affect us is in our own
supply chain. We are working with our
suppliers to see what can be done -- can
they adjust pricing, absorb some of the
tariffs, or can they relocate? On the other side, we are asking our customers to
help. It's not the first time we have had
to manage things like this.
We are seeing a slowdown in Europe,
especially in Germany. How do you
see the European market developing?
Our hypothesis is that it will be slightly
down in the next year. We had a slow-

down last year due to WLTP homologation, and we have new RDE (real driving
emissions) testing this year and next
year. It's making everybody's life a little
more difficult to validate all the models,
so we are being prudent about the European market.
What is your forecast for China?
About 22 percent of our current revenue
comes from China, and it's growing. Our
business there is about 50 percent with
joint ventures and 50 percent with domestic automakers. Right now, the market there is down 16 or 17 percent from
2018. For the full year 2019 we should
be close to minus 10 percent. We think
the market will be stable in the next year.
We are outgrowing the market there by
about 10 or 12 percentage points because the utilization rate and our content is growing, so we are affected by
the downturn a little bit. Right now, we
are not betting on a resolution of the
trade dispute between China and the
U.S. If it comes it comes, but we have to
run the company as if it won't. ANE

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Automotive News Europe - November 2019

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