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BorgWarner DualTronic(TM) Automated Transmission Technology Available on Two New VW Group Vehicles

CHICAGO, March 3 -- BorgWarner DualTronic(TM), the company's wet-clutch and control-system technology for a new-concept automated transmission, is now available on the Audi A3 and the VW Touran, and will be available on several other next-generation VW Group vehicles yet to be announced. VW refers to the technology as "DSG," which stands for direct- shifting gearbox. Although manual transmissions are the standard in Europe, DSG will be offered as an option on the Touran, and will be the only automatic transmission available in combination with VW's popular diesel-engine powered passenger cars.

The new technology enables a manual transmission to perform like an automatic transmission, yet deliver significantly improved vehicle fuel economy. DualTronic debuted to rave reviews on the VW Golf R32 DSG and the Audi TT 3.2 early last year.

"It's gratifying to see the momentum building for this exciting new technology," said Tim Manganello, BorgWarner Chairman and CEO. "By combining our electrohydraulic controls know-how with our advancements in wet-friction materials and friction systems, we've created a formula that has been extremely well received among auto makers and drivers who value an exhilarating and sporty driving experience, but who continue to demand improved fuel efficiency and the convenience of an automatic."

DualTronic eliminates the "torque-interrupt" feeling that occurs when a manual transmission shifts gears. It offers emissions and fuel economy improvements of up to 15 percent, depending on the application. BorgWarner expects the demand for this technology to grow to 20 percent of the European passenger car market by 2015, 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 centers, and centered at the BorgWarner European Advanced Transmission Development Center in Ketsch, Germany. BorgWarner was one of only two U.S. companies honored by the VW Group with its 2003 Excellence in Development Award, for DualTronic.

The VW Touran is a compact van with an exceptionally versatile interior, with five seats standard and seven as an option. Despite compact exterior body dimensions, it provides a high degree of variability and versatility for drivers who need plenty of space. It is available with a variety of gasoline and diesel engines, all featuring direct-injection technology and meeting the limits stipulated in the emissions standard EU4.

Manganello said BorgWarner expects to announce at least two more contracts for DualTronic in 2004, one of which has been signed and is awaiting public announcement by the customer. "Combining our wet-clutch expertise with our advanced control strategies has resulted in a high-potential new technology that is an integral part of our growth strategy," he said.

About 40% of the $1.3 billion in BorgWarner's anticipated new business during 2004-2006 is expected to come from the company's Drivetrain Group, which includes transmission modules and four-wheel/all-wheel drive systems including DualTronic(TM) and InterActive Torque Management(TM) systems.

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