BorgWarner, a titan in the automotive industry, is renowned for its diverse product portfolio catering to both traditional and electric vehicles. The global supplier’s offerings are categorized into three primary operating segments: Air Management, Drivetrain & Battery Systems, and e-Propulsion. In 2022, the company reported a substantial net sales increase of 12.4% to $14.2 billion, with a gross margin of 18.1%.
Air Management: Breathing Life into Engines
At the heart of BorgWarner’s operations lies the Air Management group, which specializes in critical components designed to enhance the efficiency and performance of internal combustion engines. This segment’s offerings include turbochargers, timing systems, and emissions systems. Additionally, the group provides electric vehicle products such as cabin heaters, showcasing BorgWarner’s commitment to catering to the evolving automotive landscape.
Drivetrain & Battery Systems: Powering Forward
As the automotive industry moves towards electrification, BorgWarner’s Drivetrain & Battery Systems group is dedicated to keeping pace with this shift. This group offers transmission components, torque management products, and battery technologies such as heaters and charging systems. By focusing on these essential components, BorgWarner ensures it remains a key player in the global automotive market.
e-Propulsion: Embracing the Electric Future
Recognizing the growing demand for electric vehicles, BorgWarner has established its e-Propulsion segment, which focuses on the development and production of electric motors, power electronics, and control modules. The company’s recent acquisition of Eldor Electronics and strategic agreement with BYD’s FinDreams Battery further solidify its commitment to the eMobility market. The eProduct sales for 2024 are expected to be in the range of $2.5-$2.8 billion, up from approximately $2 billion in 2023.
BorgWarner’s major clients include automotive giants such as Ford and Volkswagen, which accounted for 13% and 8% of the company’s revenue in 2022, respectively. The company’s global footprint is well-distributed, with Europe being its largest market at 34% of revenue in 2022, followed closely by Asia and North America, each with a 32% share. This geographical diversity reflects BorgWarner’s strategic positioning in the key automotive markets worldwide.
Despite some short-term challenges, such as the ePropulsion segment’s revenue miss and the Eldor acquisition’s initial operating losses, BorgWarner’s executives remain optimistic about managing profitability and margins. Investments in eProduct R&D and a flexible product portfolio position BorgWarner as a significant player in the evolving automotive industry. In 2023, the company reported over 12% organic growth in sales, reaching approximately $14 billion in revenue and delivering $565 million of free cash flow, demonstrating a strong focus on the electrification market and aligning with its Charging Forward 2027 plan to secure long-term profitable growth.