Bosch to invest over Rs 200 crore in next 5 years in India
According to Bosch Ltd.’s managing director Soumitra Bhattacharya, the company will invest more than Rs 200 crore in India over the next five years in the fields of advanced automotive technology and digital mobility.
According to Bhattacharya, who is the President of Bosch Group India, the firm is also “quietly and cautiously enthusiastic about having a double-digit rise in FY2022-23 over the previous fiscal year,” as stated in the annual report for FY22 to the company’s shareholders.
He noted that the globe is currently facing “unprecedented” difficulties, such as the chip scarcity and supply chain problem, the China lockdown, particularly in Shanghai, the conflict between Russia and Ukraine, and geopolitical changes. According to Bhattacharya, “this has led to one of the greatest inflation rates we have ever seen, with effects on interest rates and a weakening of the economy with an approaching and possible recession.”
The company reported total operating revenue of Rs 11,104.7 crore and profit after tax of Rs 1,217 crore during 2021–2022. He stated, “Bosch Ltd will invest more than Rs 200 crore in India over the next five years in cutting-edge automotive technologies and the digital mobility arena.”
Markus Bamberger, Chairman of the company, claims that the company’s markets are changing as a result of “climate action, electrification, automation, and connectivity”.
“Bosch worldwide has a robust product portfolio in electromobility and large order books and is equipped to handle challenging conditions. Additionally, we are concentrating on the promising area of fuel cells,” he continued.
According to Bamberger, the company will support OEMs in India by providing system expertise and participating in ecosystem collaborations to dominate the electrification ecosystem.
“We will also participate in the hydrogen ecosystem because our offering already has complete powertrain modules. Our goal is to keep transforming India’s mobility to be clean, practical, and congested-free,” he continued.
While electric cars will gain popularity in India, Bamberger stated that Bosch still expects internal combustion engines to dominate the market with a share of 70% to 75% by 2030.
About Bosch
Bosch is a multinational German engineering and electronics business with headquarters in Gerlingen, close to Stuttgart. Robert Bosch established the business in Stuttgart in 1886. Robert Bosch Stiftung is the owner of 92 per cent of the company.
The four business segments of mobility, consumer products, industrial technology, and energy and building technology make up the company’s key operational areas.
How does the company work?
Bosch is a global German engineering and technology corporation with its headquarters in Gerlingen, close to Stuttgart. The business makes and sells products for the automotive industry. Automotive Products and other categories are among its segments.
The business is present in the fields of building and energy technology, consumer goods, industrial technology, and automotive technology.
Motor Industries Company Ltd. was the name under which Bosch Ltd. was formed in 1951. The corporation first established an office in India in Calcutta. The business started manufacturing at the Bangalore Plant in 1953. Spark plug, single-cylinder diesel fuel injection pump, and nozzle-holder production began in 1954. They began producing multi-cylinder diesel fuel injection pumps in 1956.
Meaning of the company logo
According to Robert Bosch’s 1926 essay, “A Trademark Must Also Be Basic,” simple line drawings are the most recognisable and effective trademarks. A trademark must be straightforward and unambiguous if it is to leave an impression and be easily recalled.”
And for the past 100 years, his armature in a circle has been the ideal solution.
Founder and History
Robert Bosch is the founder of Bosch.
On November 15, 1886, the Werkstätte für Feinmechanik und Elektrotechnik (Workshop for Precision Mechanics and Electrical Engineering) was founded in a backyard in Stuttgart-West. Bosch unveiled the first low voltage magneto for gas engines a year later.
The company became the sole manufacturer of a genuinely dependable ignition in the industry starting in 1897 when it began installing better-designed magneto ignition mechanisms in autos. Gottlob Honold, the head engineer of Bosch, introduced the high-voltage magneto ignition system with a spark plug in 1902. This item opened the way for Bosch to rise to the top of the automotive supply chain.
The company established the first factory in Stuttgart in 1901, made its 100,000th magneto in 1906, and established the 8-hour workday for employees in the same year.
The Feuerbach facility was established and constructed not far from Stuttgart in 1910. In 1913, Bosch began making headlights in this plant.
Mission
Their mission statement is “We are Bosch.”
According to a Bosch spokeswoman, “We are driven to create goods that are “Invented for Life,” that arouse passion, enhance the quality of life, and contribute to resource conservation.
The company’s primary goal is to offer state-of-the-art technology solutions and to lead the way in brand-new technological developments.
Operations
Most Bosch Group businesses are grouped into the following four business sectors.
1. Mobility solutions
In 2019, the business sector selling mobility solutions was responsible for 60% of total sales. Injection technology and powertrain accessories for internal combustion engines, powertrain electrification, steering systems, safety and driver-assistance systems, infotainment technology, and concepts for repair shops, technology, and services for the automotive aftermarket, are some of its main focuses.
Transforming the powertrain and growing the business in the areas of electrification, automated driving, new electrical and electronic designs for vehicles, entering adjacent market segments, and establishing additional services are specific strategic targets for the industry.
With effect from January 1, 2018, a new division called Powertrain Solutions was established to create products for powertrain technology regardless of the energy source. The former Gasoline Systems and Diesel Systems divisions were combined to establish the new division. It provides items for powertrain technology, including direct-injection gasoline and diesel engines, electrified powertrains with battery systems, and fuel-cell technologies in the future.
Brands within this sector include:
- AutoCrew
- Bosch Car Service
- ITK Engineering
- Robinair
- HC Cargo
- Zexel
- ETAS
2. Industrial technology
The Industrial Technology business area contributed around 10% of the overall sales for the Bosch Group in the 2019 fiscal year. The industry’s Drive and Control Technology section offers specialised drive, control, and linear motion components for mobile machinery, plant building and engineering, and factory automation.
The second branch, Packaging Technology, offers packaging and process for the food and pharmaceutical industries. Its product line consists of standalone devices, systems, and services. The company decided to find a new owner for this company in 2018. Robert Bosch Manufacturing Solutions GmbH, Stuttgart, the company that supplies assembly systems for Bosch internally, is still a part of the Bosch Group; up until now, it has been a component of the Packaging Technology business.
Additionally, the Industrial Technology business sector has included the Bosch Connected Industry business unit from the beginning of 2018, which creates software and executes Industry 4.0 projects for both internal and external clients.
Bosch Packaging Technology changed its name to Syntegon Consumer Goods in January 2020.
3. Consumer goods
About 23% of the overall sales for the Bosch Group in 2019 were attributable to the consumer goods industry.
Power tools, power tool accessories, and measuring technologies are all provided by the company’s Power Tools business. Its goods include gardening tools like lawnmowers, hedge trimmers, high-pressure cleaners, power tools like hammer drills, cordless screwdrivers, and jigsaws. Convenient, high-performance cordless tools and, increasingly, web-enabled tools and services are some of the division’s main focus areas.
BSH Hausgeräte GmbH, which provides a wide selection of contemporary, energy-efficient, and increasingly connected home appliances, is another company in the Consumer Goods industry area. Its offerings include everything from washing machines and clothes dryers to refrigerators, freezers, stoves, ovens, and dishwashers, as well as small appliances like coffee makers, food processors, and vacuum cleaners.
Brands within this sector include:
- Dremel
- Siemens (under licence)
- Neff GmbH
- Gaggenau Hausgeräte
4. Energy and building technology
7 per cent of all sales for the Bosch Group were produced by the Energy and Building Technology business segment in 2019. Both the global product business for security and communications and the regional integrator business are part of its Building Technologies division (formerly Security Systems).
In a few nations, the latter provides services for building automation, energy efficiency, and security. Both classes emphasise business-related applications. The products include professional audio and conferencing systems, access control, video surveillance, intrusion detection, fire detection, and voice alarm systems.
Systems for air conditioning, hot water, and decentralised energy management are available in the Thermo technology section. It offers heating systems and energy management for residential structures, water heaters, and commercial and industrial heating and air conditioning systems.
The Bosch Global Service Solutions division provides business process and service outsourcing, especially to clients in the transportation, logistics, and information and communications technology sectors. Additionally, it offers shared-service features within Bosch.
For the house, Robert Bosch Smart Home GmbH provides products with online and smartphone control.
Brands within this sector include:
- Dynacord
- Electro-Voice
- Telex
- Worcester Bosch
- Junkers
Other business areas
The Bosch Group also conducts business in other areas that are not designated for a particular sector.
Totally owned by Robert Bosch GmbH, Bosch Healthcare Solutions GmbH is a company’s division. The subsidiary was founded in 2015 to create goods and services that enhance people’s quality of life and health. The company provides customers with connected healthcare and medical technology products and services. Bosch Healthcare Solutions declared in March 2020 that it had created a diagnostic instrument that could identify the COVID-19 pandemic’s causative coronavirus, SARS-CoV-2, in less than three hours.
Bosch claims the test may be carried out immediately at the care site, negating the need to transport samples.
Bosch Software Innovations has been involved with the internet of things for almost ten years. Its team assists businesses in managing the process of digital transformation by taking IoT concepts from the level of strategy to actual implementation.
The Grow Platform GmbH, a wholly-owned subsidiary of the Bosch firm, is Grow’s legal entity. An internal startup incubator is called Grow.
The corporate venture capital firm of the Bosch Group is called Robert Bosch Venture Capital GmbH (RBVC). RBVC invests across the globe in cutting-edge startup businesses.
Its investment efforts are centred on technology firms operating in industries that are relevant to Bosch both now and in the future, particularly automation and electrification, energy efficiency, enabling technologies, and healthcare systems. Additionally, RBVC invests in innovative products, services, and business models pertinent to the aforementioned industry sectors.
Business Model
The company’s core operating areas are spread across four business sectors:
- Mobility (hardware and software)
- Consumer goods (including household appliances and power tools)
- Industrial technology (including drive and control)
- Energy and building technology.
For numerous sectors, the company provides crucial components that are used in the finished product. One Bosch component is the battery for e-bikes, which is labelled “empowered by Bosch” next to the bike’s brand.
Revenue and Growth
Bosch made about 77.7 billion euros in revenue in 2019. One of the most recognisable names in Germany and one of the biggest engineering and electronics firms there is the global engineering and electronics corporation, Robert Bosch GmbH.
The company’s revenue increased by more than 20 billion euros in 2015. Robert Bosch carried out several significant takeovers that expanded revenue streams around this time. Included is the acquisition of a joint venture with Siemens Hausgeräte for three billion euros.
The Bosch and Siemens cooperation still do home appliance production, which is known as BSH. Additionally, Bosch and rival ZF Friedrichshafen AG had a collaboration. Electronic steering systems for road vehicles were produced by the joint venture ZF Lenksysteme. After the takeover, the company bought out the entire four billion euro business and rebranded it as Robert Bosch Automotive Steering.
Acquisitions
The company has purchased 11 businesses. On February 21, 2018, SPLT (Splitting Fares), their most recent acquisition, was made.
Investments
Bosch has made 21 investments. Their most recent investment was on November 6, 2020, when Routematic raised $2M.
Challenges Faced
The performance suffered due to a series of production cuts announced by the German industrial giant’s Indian subsidiary. EBITDA for the quarter was 483 crore, which was 10 per cent less than the typical Street estimate. Additionally, it was down 23% from the previous year.
There is little doubt that negative operating leverage hurt profitability across all of its sectors. Domestic auto sales, export sales, and non-auto sales all saw a fall in revenue. This caused net revenues to decline by 15% yearly to 2,778.8 crores, just shy of analysts’ projections.
Reduced commodity costs partially mitigated the effects of lower capacity utilisation. The ratio of raw material expenses to sales remained steady. But labour costs increased by 200 basis points on a yearly basis. Other expenses were slightly higher, too. Hence, Ebitda’s margin contracted by 220 basis points to 17.4%, which too was below forecasts.
Competitors
The top competitors of the company are Siemens, DENSO, Valeo, Delphi Technologies, Honeywell, Johnson Controls, Continental, Rockwell Automation, Eaton, and Borgwarner.
Future Plans
According to Bosch Group, the company intends to maintain people’s mobility while enhancing air quality. The corporation is also making significant investments to improve the combustion engine and make electromobility a market success to make low emissions traffic a reality.
The company has invested Rs 1,700 crore in India over the next three years. The company plans to use this funding to expand its product portfolio and provide more commercial prospects. Officials from the corporation claim that most of this money would go toward modernising manufacturing facilities in India and expanding Bosch’s smart campus in Adugodi. 3,650 of Bosch’s 18,000 engineers in India work at its smart campus in Adugodi, which was built with over Rs 370 crore in investment over the last three years. For the growth of its smart campus, the corporation has specifically budgeted an extra investment of Rs 600 crore.
Edited by Prakriti Arora
