German auto component manufacturer Bosch plans to invest Rs 2,200 crore in India, focusing on fuel economy and safety technologies. Emerging countries like India and Vietnam are on is radar where it plans to come out with low-cost products.
But as it makes more investment in the country it is aware that at the same time Indian component manufacturers are growing fast in terms of global delivery. But does that affect Bosch? "Yes... But it will take a good 5-10 ten years for Indian manufacturers to move up the value chain," says Dr Bernd Bohr, Chairman, Automotive Group and Member, Board of Management, Robert Bosch GmbH.
Further explaining why larger European and US manufacturers score higher than home-grown companies, Bohr says that the component business is about 'economies of scale' and "volumes will play an important role on how competitive one will be on global scale."
Commenting on competition with Chinese manufacturers, Bohr said that it is important to be present in various geographies and locations so that any single Chinese company does not command monopoly in a market.
Bosch's exports from India has crossed the Rs 1,000 crore mark, having made innovations in 'common rail systems', which is a critical component of an automobile. Also, it manufacturers 300,000 anti-braking systems in India, something which the company admits, requires higher level of manufacturing skills.
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