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BorgWarner Expands China Operation to Supply Engine Products to VW/Audi

CHICAGO, Dec. 16, 2004 -- BorgWarner has broken ground on a new factory in Ningbo, China for the assembly of engine products for VW/Audi's gasoline 4-cylinder world engine. The state-of-the-art manufacturing facility will be the first of several operations 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 building 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 eventually 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 enterprise, 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. The company also opened an office in Shanghai in November. Current customers in China include FAW, Dongfeng, Shanghai VW, FAW VW, Chang'an Ford, Beijing Foton, Great Wall, Chery, Jeely, Yulin Diesel, Beijing Jeep, Nanjing Iveco, Weifang Diesel, Shanghai General Motors, China Brilliance, Zhengzhou Nissan, Shanghai Hino, Dongfeng Cummins, and Chongqing Cummins.

BorgWarner recently announced $1.4 billion in expected new business between 2005-07, 20% of which is expected 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.

BorgWarner Inc. is a product leader in highly engineered components and systems for vehicle powertrain applications worldwide. The company operates manufacturing and technical facilities in 43 locations in 14 countries. Customers include Ford, DaimlerChrysler, General Motors, Toyota, Honda, Hyundai/Kia, Caterpillar, Navistar International, Renault/Nissan, Peugeot and VW/Audi.

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