Following the news that BorgWarner is to acquire Delphi Technologies;

Calum MacRae, Director of Automotive Product Development at GlobalData, offers his view:

“Similar in rationale to the PSA and FCA merger, the recently announced move by BorgWarner and Delphi Technologies will help the two companies wrestle with the new challenges presented by the CASE megatrends and come up with the age-old response of scale economies. However, this is just a short-term fix for the long-term issues that these businesses face. No doubt there will be other mergers of a similar ilk that will ratchet down costs but not lead to sustainable long-term competitive advantage.

“Of the two companies, BorgWarner is a bit better positioned than Delphi Technologies due to stronger positioning in batteries and electric vehicles, according to GlobalData’s thematic research, but it passed its heyday when it rode the downsizing trend due to its strength in turbochargers.

“Now BorgWarner, along with Delphi Technologies, (itself the legacy business when the more alluring portfolio was carved out to form Aptiv), is just one of many old-school mechanical engineering companies looking to address the disruption coming down the road by making its core operations more efficient.”