New Delhi: German engineering products maker Robert Bosch GmbH plans to invest Rs2,000 crore in its India operations over the next three years, seeking to tap an expanding market for automobile components in Asia’s third largest economy.
The investment would be made through six subsidiaries present in the country and almost 90% of it would go to the automotive division that makes auto parts, said V.K. Viswanathan, managing director of Bosch Ltd, Bosch GmbH’s flagship company in India.
The German parent holds a 70.12% stake in the Indian firm.
“The investment would be made to expand the capacity of our existing units in the country and also strengthen our research and development (R&D) activities,” Viswanathan said on the eve of the start of the five-day Delhi Auto Expo. The investment would be funded entirely through internal accruals, he added.
Bosch has 14 units and employs around 19,000 people in India, where car sales are expected to more than double to an annual three million units by 2015, from 1.4 million currently.
Auto component manufacturers, including local and international companies, are expected to invest a combined $1 billion (Rs4,650 crore) each year in India, according to Vishnu Mathur, executive director of the Automotive Component Manufacturers Association of India.
“The Indian market is growing very rapidly, spurred by domestic demand and global outsourcing, and Bosch is one of the largest players in terms of volume and turnover and its proposed investment was expected,” Mathur said.
Bosch’s Indian operations were spared the adverse impact of a global recession. For the year ended 31 December, Bosch’s sales in India increased 5% year-on-year and reached Rs6,800 crore.
Its global sales of automotive components are estimated to have declined by 20%, said Bernd Bohr, chairman of Bosch’s automotive group.
Bosch observes a January to December fiscal year.
India contributes 5% of Bosch’s global automotive sales and Bohr expects India’s share to grow to around 9% within the next decade.
“There may be little or no growth in revenues from the developed countries, but sales in countries like India and China are sure to grow,” Bohr said.
Around 12% of Bosch’s Indian revenue comes from exports to geographies such as South Korea and countries in Europe and North America.
The company expects Tata Motors Ltd’s Nano, billed as the world’s cheapest car, to be a major driver of growth in India. Bosch supplies components such as engine management systems and brakes, among other parts, for the Tata Nano.
To ramp up its R&D efforts in the country, Bosch would also be hiring 600-700 engineers locally each year to add to the 5,500 engineers it has on its rolls.
“With its highly qualified engineers, India has a great deal to offer to a technology company like Bosch in our automotive businesses,” said Bohr.