Germany-based global automotive component major Robert Bosch is the leading player in the segment in India, primarily through Bosch Ltd. Almost all automotive OEMs in India are clients of Bosch. The company is eyeing big business in the non-automotive sector. Bosch?s managing director VK Viswanathan talks to FE?s Jaishankar Jayaramiah about the company?s future plans, impact of euro crisis in the auto segment and the country?s auto market. Excerpts :
How would you evaluate your company?s performance as compared to the growth of the Indian auto market?
The Indian automotive market has started reviving from last year. The company posted a negative growth rate of 4.1% in the first three quarters of last year. However, there was a remarkable recovery and an accelerated growth rate of 38% in the fourth quarter 2009, improving net sales by 4.6% despite the recession. This year the market has picked up very nicely. If we look at last nine years, Bosch has grown in double digits, around 16-18% on compounded growth rate basis.
Which segment in the auto sector will drive your growth?
All the segments have so far registered high levels of double digit growth. We expect the positive trend to continue. Due to high base level in the second half of last year, the growth rate in the second half of this year will decline but nevertheless, in terms of volume, we expect this trend to continue or even improve.
As a group, you are also present in the non-automotive sector. Can you throw a little more light on that?
Currently, we derive 85% of our business from the automotive sector and 15% from non-automotive sector. Now our non-automotive business is also growing. Our long term goal is to get 3/4th of the business coming from automotive and the rest from non-automotive. We are not looking to increase the non-automotive business at the cost of automotive business.
Can you brief us about your investment plans?
We have invested around Rs 1,700 crore in the past five years. Around 70% of these investment happened in 2006, 2007 and 2008. We have invested only Rs 145 crore in 2009 because of excess capacity driven by slump in demand. As a group, the company will invest around Rs 2,000 crore in India during the next three years.
When will you achieve your financial goals in India?
If everything goes well, we will achieve Rs 10,000 crore in turnover in the next year, for the Group as a whole. Bosch Ltd will take couple of years to achieve this mark.
What is your long term growth strategy for the Indian market?
There are lots of opportunities in the Indian automotive market. We have created superior products not only for the higher segment passenger cars and commercial vehicles sector but also for Tata Nano or for low-priced vehicles. This indicates that we can really address all kinds of requirements. We want to achieve growth in all the sectors. We have big plans for our diesel division, gasoline, starters and generators segment.
Your exports declined in the last year. How do you see it this year?
Majority of our overseas business comes from Europe. We are seeing recovery both in Europe and North America compared to the decline in the last year.
How new emission norms will help your business?
Whenever new emission norms are introduced, the OEMs have to update their fuel injection and engine systems. In this background, the new emission norms will create demand for fuel efficient systems. We will benefit from our product line up in common rail, electronically controlled distribution systems and other fuel injection products.
