SAIC leads transmission JV program with BorgWarner

Shanghai, June 5 (Gasgoo.com) World-leading supplier BorgWarner's advanced dual-clutch transmission (DCT) systems would be put into production in Jiading district, Shanghai. And in this joint venture program between BorgWarner and multiple Chinese automakers, Shanghai Automotive Industry Corp. (SAIC) plays a leading role, according to industry sources.

The DCT program was coordinated by the National Development and Reform Committee (NDRC) and a dozen of Chinese home-grown automakers would participate. These automakers include almost all the leading players: SAIC, FAW Group,Dongfeng Motor Corp., ChangAn Group, Chery Automobile Co., Geely Automobile Holdings Ltd, Brilliance Auto. The initial investment of the JV was said to reach 3 billion yuan ($433 million).

"Qian Xiangyang, head of our technology department has arrived in Beijing to discuss details of the program," said an official from Shanghai Automobile Gear Works (SAGW) who asked to be unnamed. SAGW is a component-manufacturing subsidiary of SAIC, which produced around 1 million units of transmission with 3 billion yuan revenue last year.

According to the insiders, the Chinese side will take certain stakes with capital or technology investment, while BorgWarner is likely to license the technology to the automakers. Tom Tan, CEO of BorgWarner’s China business, refused to comment on the programs, saying that the discussion is still going on and it's not the right time to release any information about it.

DCT technology has the best suitability in China; for Chinese domestic manufacturers, it appears to be a very promising product in the long run, according to Chengwu Duan, technology research analyst of Global Insight, Asia. He pointed out that given the supporting facilities in China, application limitations, fuel efficiency, technical hurdles and market acceptance, DCT has advantages over other automated transmission including AMT, AUTOE and CVTE in China.

Statistics from the China Association of Automobile Manufacturers (CAAM) show that in 2007, China's import of transmission tops 3.28 billion US dollars from 20 billion US dollars in 2006. Also a transmission import comprises the largest item of the total auto parts import. In China, the automated transmission market is dominated by foreign brands.

"The JV program will cut sourcing cost of the Chinese automakers, but it's doubtful whether they could have access to the know-how," said an unnamed official from Jacto's Shanghai office. As the world's leading CVT manufacturer, Jatco will start local production in its Guangzhou plant next year.