Bosch plans Rs 1,000 cr investment

The Euro 36.4 billion Bosch has announced plans to invest massive Rs 1,000 crore in India in the next four years.

While the company has earmarked a Rs 550 crore capital expenditure in its Indian flagship MICO, to launch the Common Rail Diesel Injection Systems in India, the rest will be primarily to fund the normal expansion over the next four years. This round of investment will average nearly two thirds of the current gross block of Bosch in India.

Bernd Bohr, chairman automotive group, Robert Bosch, said the launch of common rail in India will result in 20 per cent savings when compared to production costs in Europe.

Besides, the local manufacture will eliminate the 20 per cent import duty on CRDI systems as well. The first locally made common rail pumps and injectors bearing the Bosch tag are scheduled to roll out of MICO's plants in Bangalore and Nasik respectively by 2006.

Bohr said, "The introduction of emission norms has triggered the awareness of advanced technologies in India and that means further growth opportunities for us. Based on this, Bosch plans to evolve the Indian R&D centres and manufacturing units as part of the group's international network."

A spin off from this move, officials said, will be that Bosch's global operations will assist the investments on common rail systems reach critical numbers. They added that, to start with, Bosch targets 25 per cent common rail pump and injector exports mainly to Bosch's Asian operations.

The CRDI plant on an initial localisation content of 40 per cent is expected to produce annually 2 lakh pumps, 15 lakh injector components and 10 lakh injector systems by four years.

Officials said that despite the fresh focus on common rail diesel systems, a Rs 120 crore investment has also been slotted for the conventional distributor diesel injection system unit at Jaipur.

Albert Hieronimus, managing director MICO, said, the focus was influenced by expectations that India will witness a substantial expansion in the diesel segment.

"The move is in line with Bosch's survey that estimates nearly 60 per cent of diesel engines in India will be on CRDI platform in the next 8 to 10 years." He added it also aligned with Bosch's strategy to accelerate preparedness for leveraging emerging market opportunities.

Further, the company is sniffing opportunities in the non-automotive business as well. Last fiscal the Indian operations achieved a Euro 413 million topline of which Euro 61 million was from automotive technology.

With less than 10 per cent coming from the non-automotive segment, Bosch's is aiming at raising this to at least 15 per cent in the coming years.

Another Indian initiative that Bosch is evaluating is safety technologies. The company is likely to introduce new technologies like Electronic Stability Program in India as well.