Overall, we are quite positive on India: Bosch chief

The world’s largest auto maker Bosch announced its first quarter results recently. It posted a 12.1 per cent increase in net profit at ₹343.75 crore on the back of a 6.5-per cent rise in net sales and income of ₹2,532 crore. In an interview with BusinessLine , Bosch’s Managing Director, Dr Steffen Berns, shares the company’s growth strategy as well as the issues concerning the automobile industry.

We would rather look at the long-term year-on-year rather than sequential. Bosch has been successful in growing stronger than the market, apart from a few exceptions. We have also performed better than the growth of the automotive market. We actually had a lot of headwind because the diesel market was low, and because the tractors market didn’t grow that well. Our project division did quite well and we achieved some good turnover in our solar energy, packaging machine and security technology.

The liquidity in the market is still a point of concern. In the power tools, construction business is not moving up and we find that there is a lot of supply in the real estate market. New construction activity has come down. This is impacting our business.

Overall, how do you see the automobile market growing in the country during this fiscal?

We are cautiously optimistic. For this year, we have seen a growth of 4 per cent plus and there is growth in the heavy commercial business but degrowth in light commercial business and we expect it to bottom out and then increase. The passenger market is also doing well but overall we don’t expect very high growth but moderate growth.

So, we are not too pessimistic but we are not going to see a big bang in this financial year. Too many things still need further improvement. One is infrastructure.

Many projects have been announced but haven’t really taken off. In the short term, we are not pessimistic and in the mid term, there is a lot of growth potential and that is the reason why we continue to invest heavily in infrastructure and technology and also in HR and this is going to continue. Overall, we are quite positive on India.

Almost every passenger car maker a few years ago would talk about the big opportunity in the rural market. Has it really happened?

If you look at the last 10 years, there has been a huge growth and if you look at the last three years, there has been no growth.

I recently did the calculations and on a quarterly basis if you take, three-wheelers plus cars, trucks and tractors together, the production volumes have been between 1.3 million and 1.4 million units for the last 13 quarters (each single quarter).

So, there have been fluctuations but not big increase since the beginning of April 2012 and I expect the growth to come back. But during the last three years, it has been more or less flat.

Can you share with us details of the capex for the fiscal and the hiring numbers?

We plan to invest around ₹650 crore this fiscal which is higher than last year’s.

We have long-term projections and forecast and are committed to further grow in India. The phase one of the Bidadi plant should be inaugurated by the end of the month. We don’t have any projections on the number of hires this year.

Are there any projects that you plan to bring to India apart from what you have already announced?

It is actually a decision of the board but we can assure you that we will go ahead and look at bringing more projects to India.

We will constantly try to do that though we need good conditions at the ground level.