BorgWarner Inc. is a global producer of propulsion system solutions for combustion, hybrid and electric vehicles. As a global automotive components and parts supplier, it is into development of mobility system solutions that reduce energy consumption and emissions, while at the same time improve performance. As the product leader with over 130 years of experience in the field of powertrain systems, BorgWarner claims to support the automotive industry in realising clean propulsion and efficient technology solutions for original equipment manufacturers (OEM)s of light, medium and heavy-duty vehicles as well as off-highway applications. The firm’s operations are spread across 62 locations in North America, Europe and Asia. In India, BorgWarner has plants in Chennai, Kakkalur, Manesar and Talegaon. APF's Manish Pant spoke to a very upbeat duo of Christopher J Lanker, Vice President & General Manager Asia, Emission & Thermal Systems and Giorgio Baccolis, Vice President of Sales about the American firm’s expansion plans in India.
What potential do you see for your products in the emerging landscape in India?
Lanker: As India starts to ramp up its mission on fuel economy that creates opportunities for us. We have lot of products that we sell in combustion, hybrid and electric propulsion systems that increase the efficiency and performance of vehicles. No matter what the propulsion system, we have products that make cars more efficient and better performing. We have done that successfully throughout the world; North America Europe and parts of Asia, and we are ready to bring that technology here.
Are you also looking at entering into JVs here?
Lanker: We are currently not necessarily looking for JVs in India. We are looking around the globe for M&As. Under the normal process we tend to tie-up with companies that make sense to us from our market perspective.
What are the market segments that you find most interesting at this point in time here?
Lanker: We are focused on combustion, hybrid and electric, and our aim is to not only be a part of the growth in propulsion systems in India but also a leader.
Baccolis: In general, we are looking at expanding our base in India. Therefore, we are strictly not focusing on just one specific technology. It is a matter of developing technology where we see opportunity in terms of volume and customers. We are looking at growing our business in India because many of our customers have declared their intent to localise a substantial portion of their sourcing locally. We can, therefore, localise different technologies under one portfolio.
Lanker: Presently we produce timing systems, cooling systems, variable speed fan drives for commercial vehicles, emission systems for both passenger cars and commercial vehicle segments, EGR valves, coolers and modules for passenger vehicles. As the opportunity arises in the market, we also have other technologies that we produce globally and will be happy to bring them to India to support the transition.
Are you also looking at doing some part of your R&D in India?
Baccolis: Our philosophy is to be as close as possible to the customer from both operational and business development perspective. We already have a capable engineering and sales team and different technologies, and we continue to grow our development centre in India. Our goal is to be close to the customer in order to develop new technologies.
Lanker: We are not specific to any one business unit nor is it specific to India. That’s our general philosophy. We will do that in India as well.
What is the extent of your presence in India?
Baccolis: We have four plants in India, so the country is well-covered as of today. But then there is further opportunity for growth out there. Our engineering base is expanding as fast as our customer base is growing with the rise in investments into India. We today see a major demand for technology and solution from the local Customers as well as customers from outside India that are investing here. We are following up on that demand with our customer.
You are keenly eyeing the hybrid and electric vehicles market in India. Based on your market research, is the country ready for those products?
Baccolis: First of all, I would like to say that we are happy to see movement from the Indian government in that direction because today we have a very well-balanced portfolio between internal combustion technology and electrification. We see a big opportunity to grow fast here in India as we are doing in other regions like China where the supporting incentive from the government has provided a strong push for both our customers and us. I believe the average global share of electric vehicles will roughly be 25 per cent of the market by 2025. For India too, the figure will be somewhere close to this number.
How does India compare to China when it comes to hybrid and electric vehicle platforms?
Baccolis: Although a very interesting question it’s a difficult one to answer. The movement of government in each region can influence the pace of adoption. Some customers move faster than others. But again, there are also customers who presently lack clarity. The picture is likely to get clearer over the next couple of years. We at BorgWarner want to stay as close to the customer as possible and develop new technologies.
What are the challenges that you foresee along the way?
Lanker: We have talked a lot about efficiency. The challenge is around how to make powertrains and propulsion systems as efficient as possible. That way the energy can be steered towards what the customer wants, which is the range and features. We see that as an opportunity for BorgWarner to be able to provide efficient propulsion systems for any kind of vehicle.
Baccolis: Even as we are heavily investing on technology for electric vehicles, we are simultaneously also investing a lot on improving the efficiency of internal combustion engine. A lot of efficiency is also required in the internal combustion engine. Even if its market is likely to decline in volume terms in future, technology upgrade continues to be of utmost importance.
What do you see as the key trends in the market at this point in time?
Lanker: Clearly, we see a lot of interest in electrification and that means anywhere from full hybrids to full-electric vehicles. This is very good news for BorgWarner because we have products for traditional combustion engines, hybrid electric vehicles and full electric vehicles. We see this as an opportunity not only for ourselves and our consumers but also big cities and the environment. And that really fits in well with what we are trying to do, and which is to provide products for a cleaner and energy efficient world.
Baccolis: The point that I have highlighted is that it is important for us to develop the technology with our customer so we are well-prepared when it is time for either full hybrid or full electric technology. This is one of the values that we provide to our customers from the very first stage of development.
One of the biggest challenges with electric vehicles is energy storage. How can that be best addressed in a country like India?
Lanker: That kind of points back to the question about efficiency. Our focus is on making the most efficient propulsion systems. Because if we can make the most efficient propulsion system for our customers, then storage becomes less critical. That takes us to the point that we try to stay close to what our customers are trying to accomplish. If you have a BorgWarner system, it’s ultra-efficient, gives you a better range and provides better utilisation power. And that is how we support that constraint in development.
Baccolis: That’s very important. The risk is that if you don’t pay attention to consistently improving efficiency, we are going to have a big gap in future. Therefore, the power to invest in new technologies for hybrid and electric vehicles is a key priority for us. We have to maintain investment for delivering results in technology because energy efficiency is the key to success in electric vehicles.