Within the next three years, Bosch expects to generate more than EUR1bn in revenue from components for low-price cars in emerging markets.
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Bosch India manager Albert Hieronimus told Auto Motor und Sport magazine that the low-price vehicle segment in Asia and other emerging markets would grow faster than any other, including the premium segment.
Bosch defines low-price vehicles as those selling for less than EUR7,000.
Bosch is a lead supplier to Indian automaker Tata, supplying injector pumps, brakes and electronics.
Hieronimus said that he expects cars under EUR7,000 to account for around 13% of the world market by 2010.
Although the market for low cost cars is attracting huge interest as the high growth area for the automotive industry in the next 10 to 20 years, there are concerns that it will be difficult for suppliers to make a good business case.
In a presentation at a SupplierBusiness conference last year, automotive industry consultant Glenn Mercer said that that volumes can be high, but also volatile because of the influence of government policy in this area.
He cited examples such as the Hyundai Getz in India, that have suddenly been made a lot less easy to sell because of a change in legislation.
He also warned that achieving profit would require discipline and “new mindsets”.
For Mercer’s full presentation, see https://www.just-auto.com/briefings/
