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Business News/ Companies / News/  Bosch to boost R&D, local electric two-wheelers components
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Bosch to boost R&D, local electric two-wheelers components

The firm sees significant electrification growth in the two-wheeler segment

Bosch is a supplier of key components to major Indian and global automakers. (Photo: Mint)Premium
Bosch is a supplier of key components to major Indian and global automakers. (Photo: Mint)

NEW DELHI : Bosch Ltd is looking to boost investments in R&D and increasing local production of components such as hub motors used in electric two-wheelers (e2w), a top company official said, as adoption of green mobility widens in the world’s fifth-largest economy.

The local arm of Germany’s Bosch GmbH also aims to expand its research and development efforts for passenger car electrification in India.

“We are looking at continued investments in the passenger car segment. We have solutions already offered to several OEMs (original equipment manufacturers) and we are discussing with several more OEMs on electrification solutions. We will also enhance our investments in two-wheeler electrification," Guruprasad Mudlapur, president of Bosch Group in India, and managing director of Bosch Ltd, told Mint. “A significant part of our activity here is in R&D, and that continues."

He emphasized sustained investments in e-axles for passenger cars and substantial allocations for two-wheeler electrification, all complementing Bosch’s global portfolio tailored for local customers.

Bosch is a supplier of key components to major Indian and global automakers, including Maruti Suzuki, Mahindra & Mahindra, Tata Motors, and the Volkswagen group. It has also been providing components for electric vehicles (EVs) manufactured by Bajaj Auto and TVS Motor Company. The mobility segment, constituting two-thirds of Bosch Ltd’s India business, sees the highest content supplied to OEMs in the commercial and passenger vehicle categories.

“We believe certainly the two-wheeler commuter segment of scooters will have significant growth in electrification in the coming years. That’s the fundamental statement, and we will work to make that happen. We have a good presence in this two-wheeler space right now. We supply hub motors to OEMs and we have new categories introduced in hub motors which are also offered now to OEMs in India. We have also localized lines for the motors, and this also helps OEMs get substantial PLI (production-linked incentives) benefits as a consequence," Mudlapur told analysts in a post-earnings conference call last week.

More than 930,000 electric two-wheelers were registered in India 2023, a 35% jump from 2022.

While electrification will be an “essential part" of Bosch’s “core future strategy", the MD admits the segment isn’t immediately margin-positive.

In 2022, the mobility solutions provider had announced an investment of 1,000 crore in the localization of advanced automotive technologies in India over five-six years.

“There’s been a significant investment (in EVs) over the last couple of years also. We don’t look at it as a segment where a breakeven will happen overnight- we are in it for the long haul and we will look to improve margins as we go forward. There also have to be gains in volume - we are investing in manufacturing of hub motors, the line capacities have to reach optimal levels and then we will have cost economics coming in. So this is a game for the long-term and is an essential part of our future core strategy. A very high part of our turnover comes from traditional parts today, but we want to move to a significant part of electrification as well," he said.

Bosch Ltd’s revenue increased 15% year-on-year in the December quarter to 4,205 crore. Its net profit came in at 518 crore, a 62% year-on-year jump.

However, he shared a muted outlook for the ongoing quarter, as national election looms. “We would expect it to be a flat quarter, or clock very minimal growth in Q4," he said.

On the likely recalibration of government incentives on EVs, particularly the Faster Adoption and Manufacturing of Hybrid and Electric Vehicles (FAME) subsidy, Mudlapur said that a global trend of diminishing subsidies has caused a dip in sales, but once the market realigned pricing, sales of EVs have seen a rebound. He pointed to the downward trend in battery prices over the last quarter, lowering the overall cost of owning an EV.

“The FAME subsidy is likely to come in a new form. This is a phenomenon that has happened globally. Subsidies for electrification have come down in many geographies that we work in. So, there is typically a small dip, and the cost of manufacturing and goods in the electrification segment compensates, holding the prices. The adoption rates continue, and OEMs also contribute to managing prices differently. In the context of India, it’s anybody’s guess what happens. Currently, we are maybe less than 2% of the market share in electrification, indicating a long way to go with considerable scope for increasing penetration rates in the mid to long term," Mudlapur said.

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ABOUT THE AUTHOR
Alisha Sachdev
Alisha Sachdev reports on the auto and mobility sector, with a special focus on emerging clean mobility technologies.
Catch all the Corporate news and Updates on Live Mint. Download The Mint News App to get Daily Market Updates & Live Business News.
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Published: 20 Feb 2024, 06:00 AM IST
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