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K. Giriprakash

Bangalore, May 21

The country’s largest auto parts maker Bosch will increase its focus on non-automobile sector to derisk its business model.

Bosch’s new Managing Director, Mr V.K. Viswanathan told Business Line that Bosch now plans to double its revenues from non-automobile business to about 30 per cent by 2015, and expects increased sales from divisions such as power tools, security systems and packaging.

Currently, 87 per cent of the total revenues are generated from its automobile business.

“While we will continue to retain our focus on the automobile sector, we will increase our businesses in areas such power tools and security systems and packaging, which will also help us in derisking our business model,” Mr Viswanathan said.

He said the Commonwealth Games, upgradation of airports and setting up of new airports, new metro rail and retail boom were some of the areas which the company hopes to get more business.

Bosch had announced earlier that it planned to invest about Rs 2,650 crore between 2005 and 2010 for expanding its existing operations in India as well as setting up a common rail production facility in the country. It has so far invested Rs 1,800 crore between 2005 and 2007, while another Rs 850 crore will be invested during the remaining period.

“Investment is a by product for us. We need to make our assets work for us. Lower the investment, the better for us,” Mr Viswanathan said.

He said there was a possibility of Bosch to expand its hydraulics business through looking at fresh capacities.

Bosch has set up a separate unit for Tata Motors’ Rs 1 lakh car Nano, and supplies key parts such as braking systems and part of the car electrics. “We believe that Nano will redefine the market once it is launched,” he added.

Mr Viswanathan admitted that with the raw material increase, Bosch business had been affected to some extent.

He said because of the slowdown in certain segments of the automobile market, Bosch’s growth in 2007 was below its own expectations.

“It is true that raw material prices are spiralling. We need to work smarter,” he said.

Bosch had earlier said that its performance should improve from the third quarter of 2008.

For 2007, its net profit rose 14.2 per cent to Rs 609.20 crore, while net sales grew 13 per cent to Rs 4,279.6 crore.

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