BorgWarner's VW-Audi Gasoline 4-Cylinder Engines Facility Breaks Ground in Ningbo, China

BORG-WARNER PRESS RELEASE
BorgWarner has begun construction on a new factory in Ningbo, China for the assembly of engines products for the VW-Audi gasoline 4-cylinder engine. The state-of-the-art manufacturing facility will be the first of several operations that are planned for BorgWarner's campus in the Ningbo Yinzhou industrial zone, all of which will be part of BorgWarner Automotive Components (Ningbo) Co., Ltd., the company's newly established wholly foreign-owned enterprise.

The manufacturing plant is expected to be completed in May 2005. "This new facility constitutes another significant investment in Ningbo, and marks another important step forward as we continue to advance our growth strategy for China," said Tim Manganello, BorgWarner Chairman and CEO.

BorgWarner expects that the facility will support production of engine and drivetrain systems and components for several local Chinese automakers. "The importance of fuel economy and air quality is increasing, as more automakers adopt European emissions standards and need the advanced powertrain technologies required to meet them," Manganello said. "Growth opportunities in China, Asia and elsewhere are continuing to multiply in these key areas. As a global powertrain product leader, BorgWarner is taking steps to ensure that we are well-positioned to take full advantage of this growth."

In addition to this venture, BorgWarner operates two other joint ventures in China. The first was formed in 1993 to supply transmission products to Beijing Jeep. That business was restructured in 2000 to focus on four-wheel drive/all-wheel drive products. A second joint venture, also in Ningbo, was formed in 1998 for the production of thermal products. Borg Warner also opened offices in Shanghai in November.

Current customers in China include FAW, Dongfeng, Shanghai VW, FAW VW, Chang'an Ford, Beijing Foton, Great Wall, Jeely, Chery, Beijing Jeep, Yulin Diesel, Weifang Diesel, Nanjing Iveco, Shanghai General Motors, Zhengzhou Nissan, China Brilliance, Shanghai Hino, Dongfeng Cummins, and Chongqing Cummins. BorgWarner has also recently announced $1.4 billion in expected new business between 2005-07, 20% of which is forecasted in Asia. The company anticipates that Asia will account for 14% of its global sales by 2006, driven by customer needs in fuel efficiency, emissions reduction, vehicle stability and demand for advanced technology.