The country’s leading automobile products’ company Bosch Ltd has quite a task on hand during the next few years as the Indian auto industry transitions to BS-VI norms. In an interview with BusinessLine , Soumitra Bhattacharya, Bosch Ltd’s Managing Director and President, Bosch Group, India, shares the company’s roadmap on helping the industry to successfully make the transition.

During the previous quarter, you had said that Bosch is cautiously optimistic about the auto sector. Do you still hold on to the same sentiment?

We have had a pretty set of decent numbers during the second quarter. I will say there are two factors which are drilled in this. The first is that there is a pretty strong offtake by the OEMs and 85 per cent of Bosch Ltd is mobility. Except for the passenger segment — which saw low growth during September and October — everything else has seen a strong double-digit growth. Second, the same quarter last year was not as strong both for the industry and for Bosch. Having said that, I think we are doing a decent job in controlling our costs and therefore the margins have also been decent. We now have to see how the demand takes place on the ground now.

Between now and 2020, the auto industry will witness several changes including new policies, deadlines for adhering to BS-VI norms. How equipped is Bosch to go through this transition phase as you have some good competition from other players as well?

For the BS-VI transition, Bosch has partnered with its customers in a very holistic manner. We offer complete systems and business solutions; we support our OEM customers right from the consumption in terms of engineering, R&D, application and supporting them in their engine programmes and meeting the emission norms up to home location and for SOP. The recent ruling by the Supreme Court that BS-IV vehicles cannot be sold after March 31 is now a clear indicator for the industry to ensure that there is no inventory of these vehicles left, that all sales are to be completed by the deadline. We believe that the FY 19-20 is going to see a huge pre-buy effect which means not only will you have a normal year’s volume but also a 30-40 per cent rise in volume due to pre-buy effect. So, it will be a sort of roller-coaster ride.

This also means that in 2021, the industry could also see a pretty sharp decline because if you have a pre-buy effect it is going to affect the next year after that. If the government is able to bring in the scrappage policy, then the decline in the growth can be contained.

Will there be an increase in investments over the next 2-3 years because of all that is happening in India in terms of new auto norms, ushering in of BS-VI?

Our global CEO has announced ₹1,700 crore investment for Bosch in India. You can assume 75-80 per cent of that will come to Bosch Ltd. A lot of that money will be ploughed into making this the headquarters campus (at Adugodi), a Bosch India headquarters. It will be one of the smartest campuses in India and we plan to bring in lot of software R&D engineers into this campus. Right now we have a headcount of 3,000 and it will go up to 10,000. By 2022, we could have upward anywhere between 10,000 and 12,000 Bosch associates just in this campus from different legal entities. It will be a combination of hires cum shifting.

What is the status on electric vehicles? Will Bosch manufacture EV batteries?

We will surely not get into the manufacturing of cells. We will source the cells from others and make them into battery packs. We will be converting battery cells into battery packs. In India, we will follow what our parent has decided and Indian market is not that big for us to manufacture something. In India, we were and are in a strong position on 2-wheelers and 3- wheelers. In the near future you will see some Bosch holistic technology in 2- and 3-wheeler launches and in 4-wheeler we have opened project house electro-mobility. So, the good news is electrification stays within Bosch Ltd. In the 4-wheeler segment, in EV we are taking defined bets. We believe that Bosch electrification will start with areas where the common man finds it convenient, affordable and innovative. That means 2- and 3-wheelers followed by LCVs and perhaps buses, passenger cars. This is the sequence we are looking at.

Related Topics
comment COMMENT NOW