Steffen Berns admits that the diesel car craze in India is on the wane. Yet, the Managing Director of Bosch Ltd and President, Bosch Group in India, continues to be upbeat on its future.

“We have seen some change in diesel consumption over the last year but it still has strong points in fuel efficiency and on the emissions side too,” Berns told Business Line.

As he puts it, the percentage of diesel cars may have come down in India but will stay in the 40-45 per cent range in the mid to long-term.

“Below 50 but above 40 (per cent) is what I believe will be the case,” Berns adds.

Staying relevant

Till end-2012, car buyers were clearly inclined towards diesel thanks largely due to the fact that it was a good Rs 25 per litre cheaper than petrol. However, with the Government effecting 50 paise hikes in diesel each month, the differential has now reduced to less than Rs 15 per litre.

For Bosch in India, diesel applications go beyond cars to include commercial vehicles, tractors, high-application and generator sets. To that extent, it remains a relevant fuel for the German auto component maker.

Berns believes that market sentiment has distinctly improved with the new Government in place at the Centre. Yet, he is only too aware that things are not going to change overnight. “Car sales were up during April-June and July figures looked positive too. There are good chances that this year will be better than last fiscal,” he says.

There is also some hope that the worst is over for heavy commercial vehicles and a revival is on the cards. For tractors, last fiscal was a record year and the first quarter of this year has also seen reasonably good growth.

“Despite El Nino fears, the momentum seems to be still strong but we have to wait to see how tractor growth pans out in the rest of the year. And even if it is lower than last year, it is still growth,” Berns reckons.

Positive outlook

There are still some concerns like the high level of inflation and inadequate/uneven rains across the country which has the potential to wreak havoc in rural incomes. In addition, it remains to be seen how quickly the impact of investments in infrastructure will kick in to spur economic growth.

“A lot has to be done still but there is a stable government in place which is a good thing. However, inflation is a big worry because it will dampen enthusiasm and sentiment,” Berns says. From Bosch’s point of view, exchange rate volatility and the recent depreciation of the rupee is only a grim reminder to balance its foreign exchange exposure. The top priority for the company is to continue innovating for local needs.

There are nearly 10,500 engineers on its India rolls who constitute the largest pool of employees outside of Germany.

The new research centre in Bangalore is expected to see greater momentum in new projects and patents.

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