Auto parts company and Motley Fool Stock Advisor recommendation BorgWarner (NYSE:BWA) continued to dominate its market in 2004. As a company that earns the butter for its bread from making sales to the automakers, you might have expected 2004 to be as poor a one for the supplier as it was for its customers, such as Ford (NYSE:F) and General Motors (NYSE:GM).

Overall, the worldwide auto industry increased in size (as measured by sales) only 3% last year. Yet BorgWarner made 15% more sales in 2004 than in 2003. How could it do that? There's only one explanation: The company has to be seizing market share from its competitors.

Recent earnings warnings from competitors such as Dana (NYSE:DCN) and Delphi (NYSE:DPH) support this view, even as industry peer Eaton (NYSE:ETN) reported a couple weeks ago that its own automotive parts unit also managed to best industry trends. Further bolstering the argument that BorgWarner is winning market share is the company's boast that even if the world auto market continues to remain essentially flat into 2005, the company will be able to drive sales up another 8-10% for the year and translate these sales into continued double-digit earnings growth.

Speaking of double digits, in 2004, BorgWarner increased its sales by fully 15% and translated those sales gains into profits growth of nearly 21% as it earned $3.86 per diluted share for its owners. Free cash flow (FCF) growth impressed similarly, rising from last year's $135 million to $222 million in 2004, for a 64% year-on-year increase.

At its current enterprise value (EV) of $3.4 billion, BorgWarner now sports an EV/FCF ratio of 15.3. With long-term growth being estimated at 12.5% per annum on average, the company isn't an absolute steal, but it's certainly cheaper than the average market multiple (which is close to two times EV/FCF growth). And in comparison to its competitors, BorgWarner -- the investment -- again faces real competition from only Eaton, which sports an EV/FCF of 18.4 and a 10% projected growth rate. Granted, even that's not a terribly close contest, but with Dana and Delphi both posting negative FCF over the past 12 months, it's the closest competition BorgWarner's stock is going to get for investors in this sector.

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Fool contributor Rich Smith has no position in any of the companies mentioned in this article.