After success with diesel drives, Bosch eyes petrol

Bosch Ltd, a manufacturer of automotive components, hopes to repeat its success in the diesel market (with its CRDi and CRS technologies) in the gasoline engines space.

The company, which ventured into the gasoline engines market by supplying to the Tata Nano, is betting big on the segment even as several ultra-low-cost cars are making their way into the Indian market.

VK Viswanathan, managing director, Bosch Ltd, said there is massive opportunity for the company in the gasoline systems category. “We started work on gasoline engine systems three years back and have invested Rs 800 crore in the last two years. We will invest another Rs 100 crore in three years”.

Dolat Capital analysts Navin Matta and Harshal Patil, in a recent report, noted that the Indian automobiles market is dominated by Japanese manufacturers, which have a strong preference for suppliers from their own country. This has restricted Bosch’s presence in the gasoline segment.

However, with the development of gasoline injection system (value motronic) for the Nano, Bosch’s presence in the segment is likely to improve, they said.

In 2007, gasoline systems contributed barely 2 to 3% of total fuel injection equipment revenues.

After working on the gasoline engine for Nano, Bosch is ready with its CRS 1.1 common rail system for Nano diesel. The product is ready from Bosch, now it depends when the Tata Motors will begin work on Nano’s diesel variant.

“Bosch’s development of a CRS-based engine management system for the ultra compact car segment throws open an entire segment for diesel cars. We expect the above distribution to shift dramatically towards the lower engine capacity segment. The Bosch group expects the proportion of diesel vehicles in the passenger vehicle segment to increasefrom the current 20% to 50% by 2012,” said Matta and Patil.

Currently CRS has localisation of around 55-60%, which is likely to go up to 85% as the trend in dieselisation picks up, added Viswanathan.

Bosch is planning to invest Rs 2,000 crore in India between 2010 and 2012 and nearly 90% of this will go in further strengthening the Bosch Automotive Groups R&D activities in India.

The investment is made out of internal accruals. 55% is invested by Robert Bosch India, 20% by Bosch’s engineering and business solution arm, 15% by Bosch Rexroth India and 5% by Bosch Chassis System and Bosch Automotive Electronics. The investment is mostly for expanding capacity.

In 2009 around Rs 20,000 crore was invested in R&D activities globally for a number of projects including development of CRS for Tata Nano diesel.