Global slowdown in auto industry hits Bosch India

Bosch Ltd has announced closure of its plants in India, in a bid to align production to the falling demand triggered by the global slowdown and credit crunch, and to avoid unnecessary inventory build up.

Bosch has suspended manufacturing of starters and generators and related activities at its export unit at Naganathapura in Karnataka on various days commencing 10 January 2009 to 31 January 2009.

This 100-per cent EOU plant manufactures regulators used in alternators, used for light commercial vehicles and heavy commercial vehicles in Europe and other countries.

Some of the manufacturing  operations at this plant have been suspended from 15 January  to 17 January 2009 and the plant will adopt a five- day week from 19 January 2009 till end February.

The company has also undertaken block closure at the Nashik plant from 19 to 24 January. The Nashik EOU manufactures common rail injectors and its various parts for selling within India, and for the international market of Bosch world. They are used in diesel vehicles.

Recently, the 7,000-odd ancillary units in the auto sector in the Pimpri-Chinchwad area have demanded tax reliefs, in what is seen as the latest signs of recessionary trends affecting the Indian auto sector.

These units have demanded exemption in value-added tax  and excise duties to help them tide over the current slowdown.

Past investments in India
Bosch has been a leading supplier of technology and services in India, and has a strong presence in the country at numerous locations that cater to diverse industry segments, both automotive and non-automotive.

Bosch, which set up its manufacturing operations in India in 1953, has grown over the years and has 11 manufacturing sites and four development centres.

The Bosch Group operates through four companies

• Bosch Limited (formerly Motor Industries Co. Ltd.)
• Bosch Chassis Systems India Ltd.
• Bosch Rexroth India Ltd.
• Robert Bosch Engineering and Business Solutions Ltd.

In January 2006, The Robert Bosch Group had announced plans to invest over Rs1,000 crore during the next three years in its four Indian subsidiaries.

In December 2007, the company planned a further investment of Rs850 crore to pand its base in the country, to keep pace with rising sales.

Auto recession figures
Besides servicing the domestic market, Bosch India operates as manufacturing and export hub to supply parts to auto manufactures in Europe and the US.

With the auto industry having been hit hard due to declining sales and lack of credit avilability, automobile parts manufactures have seen been forced to cut down their production or idle their plants.

Worldwide Bosch has scaled back production drastically. A number of temporary workers have been retrenched and shorter working hours have been introduced, indicating how the backbone of Europe's biggest industry, automobiles, which provides one in seven of Germany's industrial jobs, has been hit by the global turmoil.

US auto sales drop by over 30 per cent for major automakers. Weak sales will be continuing in early 2009.  Sales have dropped by 16 per cent in France, 22 per cent in Japan.

According to data from the Society of Indian Automobile Manufacturers, commercial vehicles sales fell by 49.51 per cent in November 2008 compared to 2007, while passenger and and heavy commercial vehicles fell by 63 per cent and LCV sales fell by over 33 per cent.