July 1, 2011: Dr. Bernd Bohr

Bosch is investing a lot in future R&D in India. Can you explain why?
There are three aspects to this. Firstly, Bosch believes that it should be close to the customer with our engineering sites so that we learn the needs of the market and have a fast feedback loop. We have a large off-shoring facility and are also developing software at Bangalore and Coimbatore.With regard to R&D, I would say that learning from India helps us to be more successful globally as it gives us specific challenges to address the low price vehicle market. Therefore, the best challenge a company can have is a market where customers are pulling and pushing with this low priced vehicle business. Besides local for local, we are taking the ideas we have generated back to the European market and significantly reducing costs for some of our products

Clearly, India’s role in Bosch can only get bigger?
Today, I would estimate that there would be about 1.3-1.4 billion euros of sales in India in 2011. Worldwide, it is 30 billion euros. That works out to five percent but India’s weightage derives from the larger growth rates we are seeing. We see 25 to 30 percent growth year over year and, going forward, this will only increase. Personally, I am always interested in markets that offer specific challenges. To put it in perspective, as an organisation, we are learning how to meet extremely tough emission regulations in the US, how to do very efficient cars in Europe, and how to do low priced vehicles in India. What we learn here, we sell there.

What role will India play in Bosch’s global gameplan, going ahead?
Bosch has earmarked a budget of Rs 2,500 crore as investments for 2011-13 as a combined number. This is significantly higher than what we had done in the past. I do not have a number for 2020 but am optimistic that the growth story that we have enjoyed in the past years will continue.

Given that India is a strong diesel market, what direction is Bosch taking down the diesel path?
We have diesel technology but petrol as well especially on the GDI (Gasoline Direct Injection). On a worldwide scale, we see tremendous growth numbers so the structural change from the port fuel injection to gasoline direct injection is important because it gives 20-25 percent fuel savings. On the diesel side, we have to look out for what is happening on the emissions front. Our challenge is to ensure that costs do not increase. This is not so much a challenge for India at the moment but in Europe, we are moving to Euro VI and on. We have to avoid having a whole chemical plant at the back of the car. We are, therefore, putting a lot of engineering power into avoiding too much aftertreatment and trying to achieve it with what we call good engine automation. For India, I think the challenge is again cost.

What powertrains is Bosch working on in India?
We have the Mahindra Maxximo which has a two-cylinder common-rail engine which we supply. We are working on a one-cylinder common-rail application and our challenge is to take out the sensors and all other nice things in the system. We are thinking of various ideas to do this and take some of those ideas back to Europe or to the US.

Can you give us an update on what Bosch is doing as far as ABS for bikes?
We see the two-wheeler market as one of the main contributors to road safety. That is why we need to introduce affordable ABS systems for bikes that cost about 700-800 to a thousand euros. We have been able to get the size down, so the system looks cute. Bosch is now working on adjusting the system to a one- channel system in which only one wheel has ABS functionality and other has conventional braking. Price-wise, we are looking at a two-digit euro number.

Have you signed up with Bajaj Auto for ABS and is Honda also on your radar?
We are in talks with several customers and cannot speak specifically about OEM projects. On the four-wheeler side, Honda is a good customer and it wouldn’t be a surprise if it were also for two-wheelers. We have not yet decided where we’d establish production lines as volumes matter. India is definitely an alternative.

Will more Bosch products be made in India?
We are building a new plant in the Chennai area for electric motors which includes wiper motors, window lifts and seat motors. So over time, we are basically taking a broad part of our portfolio to India as needed.

In Bosch’s view, which alternative fuel is the way of the future — CNG, LPG or hybrids?
The way of the future question is always how far we ourselves look at the future. If one looks at the next 10 years, then combustion engines will still be the mainstay but they will not be of the kind we have today. They will have more efficient engine management systems, start-stop technology not only at traffic lights but a host of other add-ons and we will see hybrids more in the plug-in hybrid arena because then you actually get some real electric driving for all the expensive infrastructure you have. We will see pure electric cars for commuting in the bigger cities where a range of 100km is more than sufficient. After 2020, we will see the costs of what we’ve talked about come down more as the time between now and 2020 is the decade of preparation for electric vehicles. Structural changes will take place between 2020 and 2030.