Bosch gearing up for another boom

By Li Fangfang (China Daily)
Updated: 2011-03-14 10:05
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Bosch gearing up for another boom

A technician checks capsules leaving the Bosch 3000 Encapsulation machine at the Elan Corporation plant in Westmeath, Ireland. The German company plans to integrate more into China's economy with more investment and technology innovation. [Photo / Bloomberg]

B usiness in China rose 30% in revenue terms over past five years

BEIJING - German technology and service provider Robert Bosch GmbH regards China as the major destination for its future investment as it sees the huge market potential from China's robust economic growth.

Bosch gearing up for another boom

"China will be the major market for our group's future investment as we expect a good business environment there in the near future, similar to that of the past five years, supported by central government's positive policies. China's dynamic economic growth is evidence of the region's incredible potential," said Uwe Raschke, board member of Bosch, who is responsible for coordination of company activities in the Asia-Pacific region.

"Our group took the leading position and gained a great reputation in the China market when we invested intensively after we established our first representative office in Beijing in 1989. Now, when we expect further future growth, it requires further investment," said Raschke.

Bosch's business in China increased some 30 percent on average in terms of revenue over the past five years, he added.

Raschke told China Daily that the company's sales jumped almost 40 percent last year, based on 27 billion yuan ($4.1 billion) in sales it gained in 2009 from the China market.

Bosch's preliminary figures for 2010 showed that the German company returned to its growth course in 2010 from the serious financial crisis in 2008. It generated sales of 47.3 billion euros ($67.6 billion), 24 percent more than the previous year, the highest level of annual sales in the 125 years of its history.

Raschke said that the company's recovery was greatly driven by the robust growth in emerging markets, especially in the China-led Asia-Pacific region, where Bosch achieved a nominal year-on-year sales increase of 42 percent, generating sales of more than 10 billion euros for the first time.

The company expects the global upswing to continue in 2011 with a GDP growth figure of some 3.5 percent, as well as a greater lift from emerging markets of more than 6 percent on average.

However, Raschke said he is confident that Bosch's sales in China will grow by double-digits annually in the next five years, as it aims to become further localized in products, management as well research and development (R&D).

Chen Yudong, formerly executive vice-president of Bosch China, was the first mainland Chinese to be appointed president of Bosch China, effective as of Jan 1. He is taking over the responsibility from Peter Pang, who retired from the position on Dec 31.

Chen joined the company in 2007. He has a deep understanding of the Chinese market and more than doubled sales of Bosch Automotive Technology, a segment that contributed roughly 60 percent to the group's total sales in China.

According to Raschke, about 90 percent of Bosch's local production of automotive products, industrial products and consumer goods are supplied to the local market.

"We are greatly looking forward to working together with our more than 26,000 Bosch associates in China to bring more localized technologies themed 'invented for life' as well as to provide dedicated local support for our Chinese customers," said Raschke.

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He also said that Bosch will invest heavily in research and development to improve its products in terms of quality, safety and convenience.

Raschke told China Daily that Bosch puts close to 10 percent of its revenue every year into R&D. Currently, every fourth Bosch R&D is located in the Asia-Pacific region, and more than half of the company's 21 sites in Asia have been in China.

"Bosch is committed to long-term development in this promising market and will continue to contribute to protecting the environment and saving resources in China with our extensive green technology innovations and solid local presence," said Raschke.

Although he believes the traditional combustion engine will remain central to the automobile sector for the next 20 years, Bosch is also "heavily investing" in developing electric vehicle technologies.

"We don't want to beat with competition through low prices. We want to offer affordable products for the regional markets and want to lead with technologies that reflect safety, quality and efficiency," said Raschke.