Bosch aiming to triple Asian sales by 2015

The Bosch Group aims to achieve above-average growth in Asia Pacific over the next few years, with a target of 22 billion euros in sales by 2015. "By then, we want our Asian business to contribute a strong 25 per cent to total sales," said Franz Fehrenbach, chairman of the Bosch board of management, at the opening of the new headquarters in Seoul, South Korea.

Bosch expects its Asian sales to total 7.4 billion euros in 2007, which would total an increase of 8.5 per cent. In local currency terms, average growth will be as high as 13 per cent. The high level of capital expenditure seen in recent years by Bosch is set to continue with plans to invest a further 1.4 billion euros in Asia between 2008 and 2010.

Bosch has already invested 1.4 billion euros in the region between 2005 and 2007. The company will be expanding both its manufacturing facilities and its network of development and application centres focusing on automotive technology that protects the environment and conserves resources. "Asia Pacific is one of the drivers of our growth. We have a strong presence here and the right products to allow us to continue to grow dynamically with out customers in the future," Fehrenbach said.

Within the region, the Bosch Group has now established a network of 58 sites, employing 50,000 people – and the signs are pointing towards further growth with approximately 7,000 people working at 18 research and development sites. "Bosch has had firm roots in Asia for a long time now. This means we know the markets very well, as well as our customers' requirements," Fehrenbach said.

Bosch has had operations in China since 1909, in Japan since 1911, in South Korea since 1920, and in India since 1922. Bosch is building on these many years of experience: both in established markets such as Japan, Korea, and Australia, and in the dynamic growth markets of China, India, and the ASEAN countries.

‘Green’ technologies: the main growth driver in Asia

Half of the global GDP growth is likely to be accounted for by the countries in Asia Pacific over the next few years. By 2015, the region's economic output will reach the level of Europe and North America. By that time, it is estimated that the region's population will total 4.4 billion. The Bosch Group understands the potential in this region and is preparing for this growth.

Using the car as an example, stricter environmental standards mean that efficient injection systems will increasingly be required in the countries of Asia. This is an especially good opportunity for the clean diesel, as well as for economical gasoline, systems. In addition, the demand for safety will increase significantly, with braking control systems such as ABS and ESP® gradually becoming established.

In Suzhou, China, Bosch is currently expanding its production of control units for airbags, ABS, and ESP®, at a cost of roughly 100 million euros. Also in China, the company took Asia's largest winter test circuit into operation just a few months ago. "We are strengthening our presence in Asia above all because we want to grow our business significantly with vehicle manufacturers in Asia," Fehrenbach said. In the future, Bosch expects the growth in car manufacturing by Japanese, Chinese, South Korean and Indian vehicle manufacturers to take the largest share. Today, the figure is roughly 93 per cent.

Bosch’s estimate also means that the low-price vehicle segment will become even more significant. In 2015, it is expected that the global automobile market share of these low-price veichles – with a net price less than 7,000 euros – will be in excess of 15 per cent. This translates into annual growth of roughly six per cent: twice the rate of the whole automotive market .

Bosch has already developed products specifically for this market, such as the Value Motronic, which is a particularly cost-effective control unit platform for gasoline engines with two, three or four cylinders and port injection. "Bosch’s 'Safe, clean, and economical' concept is taking on increasing relevance for vehicles in Asia. Over the next few years, new models will gradually fulfil ever stricter exhaust regulations," Fehrenbach said.

Expanding infrastructure, modern building technology, market-driven consumer goods: Bosch technologies support Asia's growth

The increasing number of infrastructural projects are also providing many opportunities for Bosch. From airports to power generation and new buildings: between 2006 and 2015, the average investment rate in Asia Pacific is expected to grow by just under nine per cent per year. By 2015, approximately 45 per cent of the 13.5 trillion euros of total global capital expenditure will be spent in this region.