Mumbai: Bosch, the world's second largest provider of automotive technologies, has announced plans of its group companies to invest about Rs1,000 crore in India over the next four years as part of its strategy to focus o­n Asia to drive global growth.

A significant part of this investment will be directed towards the introduction of the 'common rail diesel injection systems' including application, testing and manufacturing. Bosch has been present in India since 1922 through its office in Kolkata and since the last 53 years through its subsidiary, Motor Industries Company Limited (MICO).

Robert Bosch, chairman of the automotive division, who has been assigned additional responsibility for India said, "Asia, and in particular India, will play a significant role in our growth plans."

Currently, Bosch is a 36.4 billion euro company, with business interests in automotive technology, industrial technology and consumer and building technology. Its automotive division contributes about two-thirds of its global turnover. Given the rapid developments by the automotive industry in India, and significant reduction in the technology generation gap between Europe and India, Bosch will transfer global automotive technologies to MICO to enhance technological sophistication of its customers in India who include global and Indian OEMs.

Among the latest and most advanced automotive technologies pioneered by Bosch to be launched in India will be the common rail diesel injection system. Common rail has contributed to making diesel cars cleaner, more economical, less noisy and sportier.

This is o­ne of the main reasons for its success in Europe, where in 2003, almost 44 per cent of all new passenger cars that were registered, were diesel powered. The company believes that there will be a successful adoption of this technology in India as well. The first locally manufactured common rail systems are scheduled to come off production lines at MICO by early 2006.

Common rail provides an environmentally clean technology solution that conforms to the current international emission norms. With the increase in global demand for diesel and emergence of diesel as the fuel of choice for countries like India, Bosch will introduce several technological enhancements of the diesel fuel injection systems to make automotives cleaner, safer and more economical. The company believes that as the market for diesel expands, 60 per cent of the diesel applications will be common rail systems over the next eight to ten years.

All this augurs well for MICO in India. "MICO is already a leader in the Indian automotive market. We will introduce new products and technologies from the global portfolio of Bosch over the next few years to strengthen this position and respond to the rapidly changing and challenging environment," said Dr Albert Hieronimus, managing director, Motor Industries Company Limited.

Bosch will further develop the R&D competence of MICO. MICO will also play a significant role in the export market. The strengthened presence of Bosch in India will entail significant benefits for MICO that has so far enjoyed a large share of the diesel fuel injection systems market, with an average 13 per cent growth per annum over the last few years.

Bosch will also use its presence in India through MICO to further promote its interests in non-automotive spheres including power tools, security technology and packaging machinery. The company sees considerable growth potential in these sectors.

Bosch also plans to further expand its software development capacities in India through its subsidiary, Robert Bosch India Limited (RBIN), through an additional investment of Rs85 crore at the Bangalore campus. RBIN was founded in 1998 and has acquired an excellent reputation for its software development capabilities within the Bosch world.

Our Bureau,

BANGALORE, Sept. 5

EVEN though the market is yet to mature as in the West, the power tools segment in India is growing at 15 per cent, keeping alive the hopes of players in the organised sector to enhance their market-share.

The Rs 350-crore market for power tools in the country may not be comparable to the 7.6-billion euro global market, which is currently under stress from stagnant or negative growth. However, leading brands such as Bosch are encouraged by the double-digit growth as against the global market's growth of three to four per cent during the current decade.

The Bosch Power Tool division, set up by MICO in 1993, has itself recorded an impressive growth, with its current market-share touching 31 per cent and hoping to increase it to 35 per cent in about three years.

With o­nly a small market and the awareness about power tools still limited in the country, Bosch does not have plans to set up a manufacturing facility as yet; it will, like many other players, be trading the products in India.

Talking to Business Line, Mr K. Ravi, Country Sales Director (Electric Power Tools), Bosch Power Tools, said the company hoped to achieve a sales turnover of Rs 100 crore by next year, a 30 per cent increase from last year's Rs 77 crore. After a modest beginning, Bosch Power Tools retained its hold over the market to notch sales worth Rs 20 crore, three years after starting in 1993.

Despite India being a small market, all major players such as Black Decker and Hitachi have been nursing the market since the 1980s as the potential here is large, Mr Ravi said.

However, the industry faces hardships in terms of very steep duty at 52 per cent and very high tax rates, which vary from 7.5 and 8 per cent in Kerala and Andhra Pradesh respectively to a whopping 20 per cent in Tamil Nadu. Power tools are a means to improve productivity in the industrial sector; as such, it should attract lower levies to encourage larger volumes for sustenance and profitability, said Mr Ravi.

He added that despite intense competition, Bosch has mapped its targets backed by a strong dealer network equipped to provide fail-safe back-up service for the highly sophisticated power tools. Besides this strategic support, Bosch has developed the market, claiming leadership position by a comprehensive training programme for its customers.

Its predominant customer base is the construction industry, where it enjoys a 50 per cent market-share. Its grip over the woodwork segment is also quite high at 30 per cent. However, Mr Ravi said, "We are a little weak in the classical segment of metal works," where Bosch has a market-share of about 10 to 12 per cent.

The company's unbridled growth has been due to its strong research and development which has been able to optimise usage of power tools with easy handling capability and versatility, said Mr Ravi, adding that it has come out with its latest marble cutter for the marble and granite industry.

Recently, it bagged an order worth Rs 2 crore from the Indian Railway for its equipment used to pack the ballasts o­n the railway track to maintain smooth and safer movement of trains. It has also come out with bolt tightening system, widely used in automobile industry.

Its computer-backed precision has earned Bosch clientele from Fiat, Tata Engineering, Mahindra and General Motors, which will start making engines for Ford Ikon, Mr Ravi said.

Source: The Hindu Business Line