BorgWarner Inc. Business Report FY ended Dec. 2017

Financial Overview

(in million USD)
FY ended Dec. 31, 2017 FY ended Dec. 31, 2016 Rate of
Sales 9,799.3 9,071.0 8.0 1)
Operating Income 1,077.1 225.9 476.8 2)
Engine Segment
Sales 6,061.5 5,590.1 8.4 3)
Drivetrain Segment
Sales 3,790.3 3,523.7 7.6 4)


1) Net Sales
-Net sales for the fiscal year ended December 31, 2017 increased 8.0% from the previous year to USD 9,799.3 million. Excluding the negative effect of strengthening foreign currency and the effects of acquisitions and divestitures, the Company’s net sales increased by 10.3%.

2) Operating Income
-The Company’s operating income for the fiscal year ended December 31, 2017 was USD 1,077.1 million, a 376.8% increase from the previous year. The increase in operating income was primarily due to the lack of one-time expenses that were charged in the fiscal year ended December 31, 2016. These expenses included asbestos-related claims, loss from the acquisition of Remy International, restructuring expenses and asset impairment losses.

3) Engine Segment
-In the fiscal year ended December 31, 2017, the Company’s Engine segment had sales totaling USD 6,061.5 million, an increase of 8.4% over the previous year. Excluding the effect of strengthening foreign currency translation, net sales increased 7.7% over the previous year. Increased sales of light vehicle turbochargers, thermal products and engine timing systems combined with increased strength in commercial vehicle markets globally contributed to the segment’s growth.

4) Drivetrain Segment
-Net sales for the Company’s Drivetrain segment in the fiscal year ended December 31, 2017 increased 7.6% over the previous year to USD 3,790.3 million. Excluding the effect of strengthening foreign currency translation, the segment’s net sales increased 14.9%. Increased sales of all-wheel drive systems and transmission components were the primary contributing factors towards the increase in the segment’s sales.


-The Company finalized its acquisition of Sevcon, a global player in electrification technologies, on September 27, 2017 for USD 200 million. Sevcon provides control and power solutions such as battery chargers, for electric and hybrid vehicles. Sevcon's annual sales for 2017 are expected to be approximately USD 60 million. (From a press release on September 28, 2017)

Recent Developments

-The Company is aggressively pursuing its electric powertrain strategy. In response to vehicle electrification and tightening environmental regulations, the Company acquired Remy International, Inc. a drive motor supplier in 2015. The Company is expanding its electrification-related business in China and other countries worldwide. Notably, Japanese OEMs procure powertrain parts primarily from their corporate alliances. While the Company recognizes the distinctiveness of Japanese OEMs' demands and the difficulty in winning orders from them, it is expanding its business handling products for hybrid vehicles. (From an article in the Nikkan Jidosha Shimbun on August 16, 2017)

-The Company announced that it has started production of a new dual-clutch module family to be featured in the latest ZF transmission. Initially utilized in the dual-clutch transmission for V6 and V8 biturbo gasoline engines and a V8 biturbo diesel engine from major automakers, the Company’s transmission technology is also expected to be used in upcoming hybrid applications. (From a press release on May 22, 2017)

-The Company announced that it has invested USD 10 million in Autotech Ventures, a venture capital fund that facilitates partnerships among financial investors, strategic corporate investors and startups focused on the future of transportation. Through this new investment, the Company sees investment opportunities that apply to propulsion technologies and mobility areas outside of its current product portfolio. (From a press release on April 3, 2017)


-The tables below provides information on products the Company supplies for specific vehicle models.

Product Installed model
R2S two-stage turbocharging system BMW "M5", "7 Series" Utilizes four turbochargers, two each for low-pressure and high-pressure stages
Wastegate turbocharger GAC Trumpchi "GA8", "GS7", "GS8", "GM8" -
R2S two-stage turbocharging system BMW "5 Series", "M5" Utilizes two VTG turbochargers
R2S two-stage turbocharging system Mercedes-Benz "S-Class" -
6.35 mm silent oil pump chain Toyota "Camry" Dual-link design with two link profiles to reduce NVH
Engine timing system Renault "Kwid" -
Engine timing chain, primary chain tensioners, guides, arms, balancer chains, balancer tensioners Dongfeng Renault "Kadjar" -
R2S two-stage turbocharging system Land Rover "Range Rover Sport", "Discovery" Uses VTG technology and features water-cooled compressor housing
Wastegate turbocharger Honda "Civic" -
Wastegate turbochargers, VCT phasers, engine timing system Ford "F-150" Used in 3.5-liter Ford EcoBoost engine
Fan and fan drives Freightliner "Cascadia" Used in Detroit DD13, DD15, DD16 engines and Cummins ISX15 engine
R2S two-stage turbocharging system Great Wall Motor Haval "H8", "H9" -
EGR cooler, EGR valve, pneumatic bypass valve Ford "F-250 Super Duty", "F-350 Super Duty", "F-450 Super Duty" Used in Ford’s Power Stroke 6.7-liter V8 diesel engine
Complete engine timing systems including silent timing chains, guides, hydraulic tensioners, sprockets and oil pump chains GM Chevrolet "Spark", "Cruze", "Malibu" Used in 1.0- and 1.5-liter Ecotec engines built in South America and Korea
Thermostatic valves Fiat "124 Spider" Used in Fiat 1.4-liter MultiAir turbo engine to stabilize engine temperature by controlling coolant flow
Engine timing chain drive systems GAC Trumpchi "GS4" Used in 1.5-liter engine
Cam torque actuated variable cam timing technology Subaru "Impreza" Used on Subaru’s 1.6- to 2.0-liter Boxer engines
HY-VO chain GM Chevrolet "Volt plug-in hybrid", "Malibu hybrid" Features two unique link profiles to reduce NVH
Compact plug top ignition coils Changan "CS75" Made from new composite materials for use in Changan’s 1.5- and 1.6-liter engines
Silent chains Suzuki "Solio" -

Product Installed model
NexTrac all-wheel drive system GAC Trumpchi "GS8" Silent chain technology improves efficiency and reduces noise
48-volt mild hybrid system for 3-liter gasoline engines Models from three global automakers including Daimler Utilizes eBooster electric compressor and iBAS integrated belt alternator starter
Pre-emptive on-demand transfer case Range Rover "Velar" Features modular design and lightweight aluminum housing, monitors vehicle signals
High Voltage Hairpin 410 (HVH) electric motor Scania "Citywide" hybrid bus 650-volt motor generates up to 300 kW and 2,000 Nm as a fully housed motor or rotor/stator assembly
Torque-On-Demand transfer case FCA "Dodge Challenger GT" Utilizes vehicle dynamic control technology which redistributes torque based on sensor inputs
High-speed starter motor GM Chevrolet "Cobalt", "Onix", "Spin", "Montana" Used in GM Brazil’s 1.0-, 1.4-, and 1.8-liter engines
DualTronic clutch and control modules Great Wall and WEY models Utilizes advanced solenoid valves and friction materials for improved quality in Great Wall Motors wet dual-clutch transmission
Sprag one-way clutch FCA Chrysler "Pacifica Hybrid" Enables secondary motor to either generate electricity or transfer torque
48-volt eBooster electrically driven compressor Models from three OEMs including Daimler Improves fuel efficiency by 5% to 10%
DualTronic clutch and control modules with integrated torsional vibration damper Changan "Eado", "Eado XT", "CS85" -
4WD transfer case Jiangxi Isuzu "Ruimai" -


-The Company is expecting to achieve organic sales growth between 5.0% and 7.0% in the fiscal year ending December 31, 2018, resulting in net sales of approximately USD 10.5 billion.

R&D Expenditure

(in million USD)
FY ended Dec. 31, 2017 FY ended Dec. 31, 2016 FY ended Dec. 31, 2015
Total 407.5 343.2 307.4
% of sales 4.2 3.8 3.8

-No individual R&D contract exceeded 5% of the Company’s net R&D expenditures in the previous three fiscal years.

-The Company expects to invest approximately 4% of its net sales, or approximately USD 420 million into research and development in the fiscal year ending December 31, 2018.

R&D Facilities

-The Company announced plans to consolidate existing Indiana technical centers in Anderson and Pendleton into one facility in Noblesville. Construction on the leased facility is expected to begin in June 2017 and be completed in spring 2018. The 100,000-square-foot technical center will provide space for engineers, designers, technicians and office employees who support key product lines including starters, alternators and electrification technologies. The workforce will transition to the new facility as leases on current buildings expire over the next few years. (From a press release on May 3, 2017)

Product Development

Technologies showcased at 2017 International CTI Symposium
-The Company presented its advanced transmission technologies at the 16th International CTI Symposium in Berlin from December 4 to 7, 2017. At the symposium, Company experts also held discussions on high-performance P2 hybrid modules. The Company showcased its Variable Spring Absorber (VSA), an innovative enabler for further downsizing and cylinder deactivation. (From a press release on December 4, 2017)

High-voltage positive temperature coefficient cabin heater
-The Company announced it will be supplying its advanced high-voltage positive temperature coefficient (PTC) cabin heating technology for a new electric vehicle from a globally known EV automaker. The high-voltage cabin heater warms the air stream from the blower, delivering a comfortable and odor-free cabin environment, while saving battery power. Featuring ceramic PTC components as core elements, the cabin heater self-regulates to ensure high power heating is available in cold temperatures. As temperatures rise and heating demand decreases, the energy is automatically reduced. The cabin heater offers up to 7 kW of power. (From a press release on September 21, 2017)

Variable turbine geometry turbochargers
-The Company has developed specialized variable turbine geometry (VTG) turbochargers for a broad range of gasoline-powered vehicles. Perfectly matched to new combustion systems which will also be used in hybrid applications, the Company’s advanced solution is a core component of clean and efficient future propulsion systems. The Company has further optimized the design and materials of its new gasoline VTG turbocharger, which responds quickly at low engine speeds for almost instant acceleration. (From a press release on March 2, 2017)


-As of December 31, 2017, the Company has approximately 6,425 active patents and patent applications pending.

Capital Expenditure

(in million USD)
FY ended Dec. 31, 2017 FY ended Dec. 31, 2016 FY ended Dec. 31, 2015
Total 560.0 500.6 577.3
% of sales 5.7 5.5 7.2

-The Company expects to have capital expenditures between USD 575 million and USD 625 million in the fiscal year ending December 31, 2018.

Investments in U.S.

-The Company announced that it is investing USD 20 million to expand its facilities in Water Valley, Mississippi. The expansion will occur over the next two years and will help meet growing demand for advanced transmission technologies, including the Eco-Launch stop/start accumulator and the mini direct-acting variable force solenoid. The Company’s mini direct-acting variable force solenoid features an optimized hydraulic design to improve shift feel, fuel economy and emissions. Eco-Launch technology helps stop/start systems improve fuel economy with smoother launches during restarts. The expansion will add 75 employees to the 500-person workforce currently at the Water Valley facility. (Mississippi Development Authority release on September 19, 2017)

Investments outside U.S.

-The Company announced that BorgWarner Morse Systems will add 17,000 square feet of manufacturing and engineering space in its manufacturing facility in Kakkalur, India, in the latter half of 2017. The expansion is designed to meet growing demand for engine timing components for passenger cars, light commercial vehicles and motorcycles. The plant expansion will help BorgWarner Morse Systems develop and manufacture products for new Bharat Stage VI emission regulations. (From a press release on February 6, 2017)