Digitalization is a bigger game changer than electric cars for automotive subcontractors
Technological development increases demands on automotive industry subcontractors:
Digitalization is a bigger game changer than electric cars for automotive subcontractors
BORG Automotive is at the forefront of the automotive industry transformation process, and digitalization now plays a greater role than ever before. The industry’s development places new demands on the undergrowth of suppliers that will make themselves felt in the spare parts industry. Therefore, BORG Automotive now invests significant resources into being an automotive technology leader.
The automotive industry strongly focuses on two primary areas: electric cars and the new tasks workshops and contractors will receive as electric car proliferation continues. Yet, vehicle electrification does not set the agenda at the Danish manufacturing company BORG Automotive. Car digitalization is an even bigger game changer, placing greater demands on industry transformation.
BORG Automotive, owned by the industrial conglomerate Schouw & Co., is Europe’s largest independent automotive spare part remanufacturing company, with a turnover of DKK 1.8 billion in 2022. The company has long been developing new spare part solutions for the market, counting over 250 million passenger cars in the EU in 2022. The average car is almost 12 years old.
"We will always be at the forefront when technologies take hold and become part of even more ordinary cars on the road. The development means that it is more necessary than ever to be a technological leader and invest in research and development if you want to make an impact”, says CEO Kim Kruse Andersen from BORG Automotive.
Pre-test of electric steering rack, which is performed at BORG Automotive's own production site.
Electric cars replace internal combustion engines with electric motors, but the steering, brakes, and air conditioning require replacements when broken or worn out. Therefore, the industry should focus not only on electrification but also on digitalization.
“Digitalization requires different skills and expertise. One example is that car steering will communicate with other car parts to act in the best possible way, and the cars will be equipped with far more technology than we see today and developed with advanced, complex digital networks unseen in the world so far. Each technology must work across all products — a complete interconnection,” says Kim Kruse Andersen, continuing:
“Therefore, spare part manufacturers and remanufacturing companies must do something different than before, which is a major challenge for companies that manufacture spare parts. Still, we feel very well equipped due to our significant investments in being up to date on the various technologies and developing solutions that fit the cars of the future."
Investing in technological development
BORG Automotive is a prime example of how company owner, Schouw & Co., invests long-term in leading companies and contributes to their market adaptability.
"BORG Automotive is already among the most talented in the industry and is always at the forefront of technological development,” says CEO Jens Bjerg Sørensen at Schouw & Co, continuing:
“At Schouw & Co., we think long-term and have the financial strength to make the necessary investments. We are keen to make strategic investments in development, and our goal is to transform businesses to become even bigger and stronger. BORG Automotive is an excellent example of this.”.
High demands on sustainability
In the same way that digitalization owes its way to the automotive industry, far greater demands are placed on sustainability.
BORG Automotive works with spare part remanufacturing and has a circular business model. This model involves selling high-quality, remanufactured auto parts and having a return system that recirculates each product. No materials are needlessly used, extracted, or discarded. Instead, BORG Automotive use and reuse resources in a loop, ensuring efficient use of materials and less waste. Therefore, the company is well prepared for the future.
“Sustainability has always been part of BORG Automotive’s DNA. We have been working with a circular business model for over 40 years, and we know how to adapt to the global market and its sustainability demands. We already have extensive experience with remanufacturing, where we save 96% of the raw materials used to produce turbochargers and car starters. Also, CO2 emissions and energy consumption are significantly lower during refactory,” Kim Kruse Andersen says.
A remanufactured brake caliper to the left and a damaged brake caliper, also called a core, before remanufacturing to the right.