The Indian auto industry is in the midst of a severe slowdown but Steffen Berns is not unduly concerned.
“I would not say there is no hope. Our overall outlook continues to be positive and we believe in the India long-term growth story,” Berns, MD of Bosch Ltd and President of Bosch Group India, told Business Line in a telephone interview from Bangalore.
Driving home the point that the April-June quarter saw some growth positives in tractors and three-wheelers, Berns said the German auto supplier giant had complete faith in India’s inherent strengths.
“For the moment, there are pretty dark clouds and it has not exactly been a smooth ride.
“The business environment is challenging but we are in cost-saving mode and taking appropriate measures,” he added.
While the routine checks on hotel expenses and business trips are part of this exercise, Bosch is also laying emphasis on productivity improvement, optimising value streams and eliminating waste. Despite these trying times, Berns reiterates that Bosch has not scaled back on most of its long-term investments for India.
Significant among these is the move to shift out of Bangalore to a bigger location in Bidadi, 32 km away on the Mysore expressway.
This will pave the way for the present Bangalore campus to emerge as an important technology centre over the next three years.
Bosch has also identified its non-auto businesses in India as critical growth engines, especially during the current slowdown.
These include segments like power tools and security systems, where the company sees immense growth potential.
Going forward, local innovations and new India-specific opportunities will become yet another priority.
“We have many ideas and there is a nice pipeline underway. The key is to ensure local innovations for the local market,” said Berns.
The Tata Nano experience, for instance, showed Bosch that the lessons could be applied for other low-cost car projects which could well become a reality in emerging markets like the ASEAN region and Africa.
The Nano lesson
From the company’s viewpoint, the Nano was a catalyst for cost-innovation. It worked on the gasoline system in a project driven out of India with support coming in from the Bosch family of engineers in China and Germany.
Berns believes diesel will continue to be the fuel of the future even though the craze, especially in hatchbacks, is gradually on the wane. “I agree that the initial spurt for diesel in India was due to the price differential with petrol but there are other important benefits which will eventually rule in its favour,” he said. These include mileage and emissions which have propelled demand for diesel in markets across the world. Bosch, likewise, remains bullish on its India prospects, both in commercial vehicles and cars, and is betting big on the growth of its common rail systems.
According to Berns, India has an important role in the Bosch global roadmap. The company recently opened an office in Bangladesh, for which product support will come from the Indian operations. There is a likelihood of other countries in the vicinity becoming part of a similar business model. However, this does not mean India will end up being the gateway for Africa or ASEAN, which will have independent operations.