BorgWarner DualTronic(TM) Transmission Technology and BorgWarner Turbochargers Power Bugatti 16.4 Veyron

BorgWarner DualTronic(TM), the company’s wet-clutch and control-system technology for a new-concept automated transmission that was launched this year on the Audi TT 3.2 and VW Golf R32, is on the 2004 Bugatti 16.4 Veyron. The industry-first technology enables a manual transmission to evolve and perform like an automatic transmission, yet deliver vehicle fuel economy improvements over automatic transmissions.

“The Bugatti 16.4 Veyron is the fastest, most powerful production vehicle ever built,” said Tim Manganello, BorgWarner Chairman and CEO. “While the volume of a limited-edition vehicle is small, the role that DualTronic(TM) plays in the Bugatti certainly illustrates the far-reaching potential of the technology. The system’s capacity for extremely fast yet imperceptibly smooth clutch-to-clutch shifts — not to mention its ability to manage the highest engine output on the road, powered by four BorgWarner turbochargers — figures prominently in the vehicle’s performance.”

With DualTronic(TM), starting and shifting characteristics can be easily adapted to achieve a very smooth feel that rivals the conventional automatic transmission, with fuel economy improvements in the 10-to-15 percent range. Manganello said BorgWarner expects the demand for this technology to grow to 18 percent of the European passenger car market by 2010, and to gain a foothold in North America and Japan during that time.

Development of the system for VW was the result of collaboration between engineers throughout BorgWarner’s network of technology operations, and based at the BorgWarner European Advanced Transmission Development Center in Ketsch, Germany. DualTronic(TM) earned BorgWarner a VW Group 2003 Excellence in Development Award, which recognizes exceptional performance of suppliers to VW, Audi, Skoda, Seat, Bentley, Bugatti and Lamborghini. Twenty-five suppliers were honored in the areas of quality, logistics/delivery, entrepreneurship, environment and development. BorgWarner was one of only two U.S.-based companies to receive the award, and the only supplier in the drivetrain area of the five companies honored in the development category.

Pending customer permission, Manganello said BorgWarner expects to announce at least two more customers for DualTronic(TM) in 2004. “Combining our wet-clutch expertise with our advanced electrohydraulic control strategies has resulted in a very exciting and high-potential new technology from BorgWarner’s Drivetrain Group,” he said. “DualTronic(TM) is an integral part of our growth strategy.”

BorgWarner Inc. (NYSE: BWA) is a product leader in highly engineered components and systems for vehicle powertrain applications worldwide. The company operates manufacturing and technical facilities in 43 locations in 14 countries. Customers include Ford, DaimlerChrysler, General Motors, Toyota, Honda, Hyundai/Kia, Caterpillar, Navistar International, Renault/Nissan, Peugeot and VW/Audi. The Internet address for BorgWarner is: . For further information contact BorgWarner Corporate Communications at 312-322-8500.

Statements contained in this news release may contain forward-looking statements as contemplated by the 1995 Private Securities Litigation Reform Act that are based on management’s current expectations, estimates and projections. Words such as “expects,” “anticipates,” “intends,” “plans,” “believes,” “estimates,” variations of such words and similar expressions are intended to identify such forward-looking statements. Forward-looking statements are subject to risks and uncertainties, which could cause actual results to differ materially from those projected or implied in the forward-looking statements. Such risks and uncertainties include: fluctuations in domestic or foreign automotive production, the continued use of outside suppliers by original equipment manufacturers, fluctuations in demand for vehicles containing the Company’s products, general economic conditions, as well as other risks detailed in the Company’s filings with the Securities and Exchange Commission, including the Cautionary Statements filed as Exhibit 99.1 to the Form 10-K for the fiscal year ended December 31, 2002.

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