Bosch has opened its first manufacturing plant for common-rail high-pressure pumps in India.
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The new plant in Bangalore is part of a comprehensive program of investment: between 2005 and 2008, when the supplier intends to earmark around EUR325m for capital expenditure in India. EUR100m of this is for the establishment and expansion of diesel production.
The new production line is capable of producing up to 1,000 common-rail diesel pumps per day. Bosch has been manufacturing injector components for diesel systems at its Nashik site since end of 2005. In 2007, it is planned to start production of common-rail injectors there.
The Bosch Group employs more than 15,000 people in India, and is the country’s largest supplier.
“Modern diesel engines are clean and economical. They will also gain strong popularity in India,” said Bosch board member Bernd Bohr at the ceremony to inaugurate the new high-pressure pump manufacturing facility.
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By GlobalDataBosch expects diesel’s share of the Indian car market to rise from its current 30% to more than 40% by 2010, partly because diesel is 30% cheaper than petrol.
“We are well equipped to be able to accompany this growth. We have designed our new manufacturing facilities so that we can flexibly serve the requirements of automakers, especially locally based ones,” Bohr said.
In 2005, Bosch sold about 40,000 common-rail systems in India. By 2010, this is expected to be as many as 600,000 systems.
“Nearly every automaker in India has now announced that it will be launching diesel cars with common-rail technology,” Bohr said.
India’s growth is also reflected in business developments: in 2005, the Bosch Group generated sales of EUR570m with customers in India. This year, the figure is expected to reach EUR670m, an increase of 17%. And, if sales within the Bosch Group are included, sales of its Indian companies were EUR730m in 2005. Here, too, sales are expected to rise by 17% this year, to reach EUR850m.
“India is one of the growth motors for our business in Asia Pacific,” Bohr said.
Vehicle sales in India have been rising by an annual average of 20% since 2002, according to Bosch.
“Given this growth, India could be one of the world’s five most important automobile markets by the beginning of the next decade,” Bohr said.
Only one in every two hundred people in India is a car owner at present.
“But a quarter of Indian motorcyclists are planning to buy a car as the next stage of their ‘motorisation’. This alone means an additional sales potential of more than a million cars a year,” Bohr said.
At the same time, nearly 30,000 miles (50,000km) of the Indian road network are to be widened by 2012. The country is already the world’s second largest motorcycle market, and the largest market for tractors and three-wheelers.
Bosch also expects to see rapid growth in the low-price vehicles segment (priced under EUR7,000). In India, growth in sales of these vehicles is especially strong, and is forecast at about 10% a year between now and 2015.
If these vehicles are also to comply with ever stricter emission standards, they will need to be equipped with electronically controlled direct-injection systems within a short development period.
“For this reason, we will not only be expanding manufacturing in India, but also development and application work for common-rail systems,” Bohr said.
The safety of these cars is also to be improved considerably in the next few years. With technologies such as antilock braking and electronic stability control.
“As far as Bosch is concerned, we are not just onlookers of developments in India, but have been in the heart of those developments for many years,” Bohr said.
