M. Ramesh

Recently in Wuzburg (Germany), June 15

IT looks like Robert Bosch GmbH, a manufacturer of common rail direct injection (CRDi) systems, might bring its technology for Indian commercial vehicles from its plant in China.

In return, the company might supply CRDi systems for cars from India to the Chinese market. CRDi is an advanced technology, with which the precise quantity of pressurised fuel gets injected into engine cylinders, resulting in better combustion, higher power and lesser emissions.

Answering a question, the Managing Director of Mico Industries Company Ltd, a subsidiary of Bosch, Dr Albert Hieronimus, said that Bosch had not decided on sourcing CRDis for trucks from China. Dr Hieronimus met journalists from India here on the occasion of Bosch unveiling its new generation technologies.

He noted that the Indian commercial vehicles market do not have the numbers to justify the local production of CRDi systems. India produces about 175,000 trucks ever year. The truck majors, Tata Motors and Ashok Leyland, are working on CRDi-fitted engines and both are in talks with Bosch. However, because of the higher cost, the numbers are likely to be small initially. The common rail systems for the trucks would initially come from Germany and later from China, only when volumes pick up. But Bosch sees a big market for CRDi for cars.

Bosch has said that it would invest Rs 1,000 crore in India over the next five years. Most of the investments will be for the production of components for CRDi systems for cars. The company will manufacture high-pressure pumps from Jaipur in 2006 and injectors from the Nasik plant in late 2006-07.

Dr Hieronimus expects the demand for such systems to rise in line with the growth in diesel cars, for which he sees a big future in India. Currently, about 20 per cent of the (7.3 lakh) cars produced in India are diesel-powered. This would grow to 40 per cent in a few years, he said.

He pointed out that the volumes lie in the A and B segments , but these cars are all petrol-powered. "When they get diesel engines, they will get CRDi," he said. He said that Bosch is in talks with Maruti for fitting its cars with CRDi. Asked for a comment on Tata Motors' tie-up with Delphi for CRDi, he said that Bosch is "still fighting" for the business. Dr Hieronimus, however, said would like more flexibility in Indian labour laws.

Answering a specific question on any constraints that Mico faced in India, Dr Hieronimus noted that India has a pool of highly talented people. "On the other hand, when it comes to blue collar workers, labour laws need changes." He said that the other problem Mico faces in India is the poor infrastructure.

Barring these, Mico finds India a sure bet for good business. The company, he said, "has two major strengths." First, it has a competency built over 50 years and a network spanning over a thousand cities and towns across India. Second, it has full access to all technologies of its German parent, Bosch. "This combination is hard to beat," he said.

(This article was published in the Business Line print edition dated June 16, 2005)
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