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November 22, 2005

CHINA: Bosch plans big spend

Bosch chairman Franz Fehrenbach has announced plans to ‘significantly’ expand activities in the Chinese region.

Bosch chairman Franz Fehrenbach, has announced plans to ‘significantly’ expand activities in the Chinese region.

Speaking at the opening of a new development and manufacturing facility in Wuxi, China, Fehrenbach said Bosch plans to invest a further EUR650m in China during the next two years. It had invested EUR550m to the end of 2004 and doubled manufacturing facilities to 20 in the last five years.

Bosch has a strong focus on China. We see it as a core country for our business in the entire Asia-Pacific region,” said Fehrenbach.

The new Wuxi site covers 300,000m² and is 120 miles (200 kilometres) west of Shanghai. By 2007, Bosch will have invested €200 million in the facility to develop and produce diesel systems.

“This year, the sales of our Chinese companies are likely to exceed EUR1.2 billion. Year on year, on a comparable basis, this means a 20% increase” Fehrenbach said.

By 2007, Bosch intends to more than double sales by its Chinese companies to EUR2.5 billion. Purchases will also double from the current EUR670 million and the number of employees will rise from 14,000 now to almost 18,000.

Fehrenbach said the Asia-Pacific share of Bosch ‘s worldwide sales is currently 14%, and this is expected to rise to 25% in 10 years. This will be achieved through activities such as the EUR100m investment in common rail diesel systems in India by 2007 and a further EUR100m on new diesel technology products in South Korea by 2010.

Fehrenbach said he expects China to be producing more cars than Japan and Germany and second only to the US in just six years.

He believes there is strong potential for the introduction of state-of-the-art diesel systems in China. The low consumption and positive eco-balance of the ‘clean diesel’ make it a strong product for the market.

“In Western Europe, every second new car is a diesel, while in China this share is currently very low. In the next 10 years however, it may increase to some 15%.” By increasing its diesel share, China’s dependence on imports of crude oil could be significantly reduced, and carbon dioxide emissions could be lowered. This would, in-turn, bring the country closer to achieving the targets set out in the Kyoto Protocol.

Bosch also expects to see significant growth in fitment rates of the active safety system ESP (Electronic Stability Programme) in China. In 2004, only 2% of all newly manufactured cars in China were fitted with the system, but it is predicted that this figure will increase to as much as 10% by 2009 following an increased demand for safety. Currently, the number of road deaths in China is double that of Europe, despite significantly lower traffic density.

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