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China gears up for major auto venture

By Li Fangfang (China Daily)
Updated: 2009-05-21 08:18

BorgWarner United Transmission Systems Co Ltd (BWUTS), a joint venture between the US auto component maker and China Automobile Development United Investment Co Ltd (CDUI), yesterday kicked off the construction of its manufacturing base in Dalian, a coastal city in northeastern China.

The $200 million venture, 66 percent held by BorgWarner, would produce dual clutch transmission (DCT) modules for gearboxes, "the heart and soul of the power system", Bernd Matthes, president and general manager of BorgWarner Transmission Systems, said.

Matthes said the venture could "help the Chinese automobile industry to close a major gap in its production portfolio and leapfrog international competition with the latest and most advanced transmission technology".

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"DCT is the most effective way to produce an automatic transmission, especially if investment in manual transmission manufacturing is already done, as in China."

"Currently, more than 80 percent of the automobile technologies have been localized. However, the transmission gearbox is the last one (to be localized)," said Hanson Zhang, general manager of BWUTS. "BorgWarner believes that the future market is here in China."

Supported by the National Development and Reform Commission, CDUI was set up by 12 Chinese automobile OEMs (original equipment manufacturers), who had more than 90 percent share of China's homegrown passenger car market.

BWUTS will start production of DCT modules with an annual capacity of 100,000 units in 2011.

The venture aims to finish construction of the second phase in 2016 and the third phase in 2020, and achieve its planned total capacity of more than 1.5 million units, which will account for nearly half of the US company's global annual production of 3.5 million units after ten years.

By that time, 80 percent of the vehicles the 12 Chinese auto OEMs produce will be equipped with DCT gearboxes.

Matthes promised to make China the first market to launch its latest DCT design.

BorgWarner also said that it is in talks with FAW on a possible gearbox assembly program, which would be located in Changchun, also in northeastern China.