Bosch Group to commit large investments in CRDi unit

New Delhi: The Robert Bosch Group is planning to invest over Rs1,000 crore during the next three years in four of its Indian subsidiaries one of which is its flagship company Motor Industries Company (MICO), the others being Robert Bosch India, Bosch Chassis Systems India (formerly Kalyani Brakes) and Bosch Rexroth India.

Robert Bosch is the pioneer of CRDi technology and also the world's largest suppliers of automotive technology and is also the world's largest suppliers of automotive technology with patented products in fuel injection technology and a global leadership in car related patents.

Worldwide, Robert Bosch caters to over 75 per cent of the CRDi market followed by Siemens VDO, Delphi (Lucas) and Denso.
A large part of the investment will go into setting up facilities for the manufacture of common rail direct injection systems, a key component for new generation diesel engines.

"In the years up to 2015, we expect to see Indian automobile production increasing by eight percent per year on average," said Dr Bernd Bohr, chairman automotive group and member, board of management Robert Bosch GmBH, at the Auto Expo in New Delhi.

The group sees tremendous opportunities in the area of clean, eco-friendly diesel systems, as India is already tightening its emissions legislations since 2000, following the pattern set by Europe as he expansion of India's infrastructure is accompanied by increasing motorisation.

In 2004 the Bosch group announced investments of upto Rs1,000 crore in the Indian market. Hence the total investments the company would make in India add upto Rs1,800 crore till 2008. Of the total funds infusion, about Rs550 crore would be invested in the large-scale series production of high-pressure common-rail systems.

Apart from this the investment would be utilised for ramping up capacity, routine capital and maintenance expenditure and developing new research and development infrastructure, across the group subsidiaries in the country.

Bosch started production of injector components for the common rail system in MICO's Nasik plant at the end of last year. The manufacture of the complete injectors will follow in 2007 in Bangalore, and the first common rail high-pressure pumps will be produced in mid-2006.

The Bosch Group, one of the largest Indo-German groups, recently acquired an 80-per cent equity stake in Kalyani Brakes and has renamed the subsidiary company Bosch Chassis Systems India, which manufactures hydraulic brakes for passenger cars, two-wheelers, three wheelers and tractors.

Group sales of Bosch subsidiaries in India have quadrupled over the last decade and year-2005 sales stood at Rs3,802 crore. The group reported exports of about Rs400 crore for 2005 and is targeting an annual increase in exports to reach a level of about 20 per cent of the total group turnover in India. By 2008, the group is targeting to double exports.

The components that would be exported to markets such as Korea, Japan, Europe and the Far East will include fuel injection parts, braking components and fuel pumps, Dr Bohr said.

Earlier on Tuesday Bosch announced setting up of a second center in India that would be ready by the end of this year. The second center would be much like its present facility in Bangalore set up with an investment of Rs45 crore ($10.1 million).

As part of its expansion plans, Bosch India will add 1,000 employees to its India operations every year with the aim of reaching a headcount of 6,000 by 2010 from the current level of 2,900.

Ever since the Indian government decided to introduce stricter emission norms, from April last year, most diesel vehicle makers have begun turning to CRDi technologies to comply with the norms. Hyundai fits CRDi diesel engines in its Accent and Elantra models, and DaimlerChrysler in its Mercedes range.

CRDi is the new state-of-the art generation diesel technology that is largely being used on premium cars worldwide and is 15-20 per cent more expensive than conventional diesel engines. These engines are based on direct injection technology and have "rails" which inject pressurised fuel directly into the engine which significantly improves engine efficiency and reduces noise and vibrations.

As against a conventional diesel engine which transfers most of the vibrations it causes to the body of the car, CRDi electronically controls the engine pressure, fuel quantity and injection timing to give better fuel efficiency and at the same time reduces nitrogen oxide and particulate emissions, making the vehicle more environment friendly.

However, spare parts and components of CRDi engines are expensive and therefore, for city driving petrol engines hold the cost-per-km advantage. However, the newer generation diesel engines require lower maintenance than their IDI counterparts.

For Robert Bosch, the prospects are all the brighter as it sees commercial vehicles also running on CRDi diesel engines in the near future.

According to Dr Bohr, the increasing demand for diesel is not the only outstanding development in the Indian automotive market; the trend is also towards the low-cost vehicle. "Although we expect to see an above-average increase world-wide in sales of vehicles whose net price is less than Rs400,000, this increase will be especially high in India. We are working hard to provide systems for low-price vehicles that allow them to be safe, clean and economical."

The latest trends in automobile and fuel sales show that customers are shifting to diesel cars and carmakers say demand will be fuelled by the fact that diesel engines are 35 per cent more fuel efficient than gasoline. The performance level of the CRDi diesel engine in terms of responsiveness and NVH is closer to gasoline engines.

In the long term, Bosch also predicts a trend towards more vehicle safety in India. At more than 80,000 a year, the number of road deaths is twice as high as in Europe, where traffic density and speed are significantly higher. According to Dr Bohr, this is a figure that can also be reduced in the long term in India, by the increasing use of technologies such as the antilock braking system (ABS) or the electronic stability programme (ESP), which reacts to prevent potential skidding accidents.

Bosch therefore places great importance on driving forward technological progress in accident prevention and environmental  protection. Its automotive technology business unit spends more than nine per cent of its sales revenue on research and development - far more than the average for the industry.