German auto supplier Bosch has earmarked Rs 850 crore for its Indian operations for the next three years. This will bring its overall investments in the country since 2005 to Rs 2,650 crore.
To look at greater outsourcing for the Asia-Pacific market
MUMBAI: German auto supplier Bosch has earmarked Rs 850 crore for its Indian operations for the next three years. This will bring its overall investments in the country since 2005 to Rs 2,650 crore.
Its largest domestic subsidiary, Mico, will hereafter be called Bosch Ltd, in an attempt to boost the company’s brand.
This was already done in the case of the Pune-based Kalyani Brakes which is now Bosch Chassis Systems after it got majority control over two years ago.
Bernd Bohrm, chairman, Bosch automotive group, made these announcements on Thursday. The additional investments, he said, would go towards setting up facilities for gasoline systems, electronic control units and ABS systems. These will be commissioned at its existing plants in Bangalore and Pune.
Clearly, from Bosch’s point of view, these investments will see India emerge as a valuable sourcing option for other parts of Asia.
This is already happening in a big way with Hyundai in Korea where injectors are sourced from the Bosch plant in Nashik and the levels will only increase in the coming years. At present, exports from its Indian arms are Rs 1,000 crore of the total business of Rs 5,700 crore.
Bohr, however, reiterated there will virtually be no buyback of components from India for Europe. The company already has other low-cost countries in its kitty like East Europe, Mexico, Brazil, China and Thailand which could meet this need.
Bosch is extremely bullish on the Indian car market where it sees huge business opportunities for supply of common rail systems. What is particularly remarkable, going by what Bohr said, is the fact that it has recognised the importance of “low-price” vehicles simply because they are the ones that will generate the volumes. This is an obvious reference to the Tata Rs 1 lakh car where Bosch has already bagged the order for supply of key engine management systems.
Bajaj Auto is also working on a $3,000 model along with Renault and Nissan which is tipped to debut by 2010. It is quite likely that Bosch will go all out to get the mandate. The other avenue is, of course, cars coming in from the Mahindra-Renault-Nissan alliance too though indications are that Delphi will be the frontrunner for common rail systems.
Bosch also estimates share of diesel engines in light vehicles to increase from 38% to 45% by 2010. It has targeted production of 1.3 million common rail systems by 2010 and this will reach the two million mark in 2013. In addition, it plans to produce 1.5 million starters and two million alternators. By 2015, the Asia-Pacific region could account for 25% of Bosch sales worldwide.
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