Bosch will supply hybrid technology to VW, Audi and Porsche from next year. However the internal combustion engine with direct injection will continue to dominate the automotive market place for the next 20 years.

That was the view of Bosch manager, Rolf Leonhard, speaking at a press event in Germany this week. The German press agency reported that Bosch gave as an example the US where, in a total annual market of 16.4m light vehicles in 2006, just 240,000 were hybrid vehicles, accounting for just 1.5% of sales.

By 2010 production capacity for hybrid cars is forecast to reach 1m units but this would cover just 6% of the US market and around 2% worldwide.

Bosch, Continental and ZF are competing with the OEMs to develop hybrid technology. Toyota is currently market leader, and has licensed its technology to others including Ford and Nissan, while GM, DaimlerChrysler and BMW are cooperating in the US to develop their own hybrids.

Bosch is placing its bets on improved diesel and petrol engines with direct injection. 'Clean' diesels are improving the image of these engines in the US and Bosch is forecasting that the diesel share there will rise to 15% of the market by 2015.

Bosch is forecasting that low priced cars (under EUR7,000) will account for around 13% of the global vehicle market by 2010.

Bosch manager Wolf-Henning Schneider said that this equates to around 10m vehicles produced for that price bracket by that year.

Growth in this segment is expected to be mainly in China and India. One example is Tata's one lakh (100,000 rupees or roughly EUR2,000) car that will go into production in India in the second half of next year. Bosch will supply its brakes, generators and injection systems and expects total turnover in this segment to reach EUR1bn, or 25% of the global market.