Bosch to pump in $217 M to build common rail systems

By siliconindia staff writer   |   Tuesday, 24 August 2004, 07:00 Hrs
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BANGALORE: German auto component major, Bosch, said on Monday that it plans to invest around Rs 1,000 crore in India over a period of four years.

It will also invest around Rs 85 crore in its Indian software company, Robert Bosch India Ltd.

The member of the company's board of management and head of automotive business, Dr Bernd Bohr, told presspersons that out of Rs 1,000 crore, around Rs 550 crore will go towards production of common rail diesel injection systems in India through its subsidiary Motor Industries Company (MICO).

Around Rs 150 crore will be invested every year over a period of three years in other projects of MICO including expansion of the Jaipur plant which makes distribution pumps.

Bosch currently invests around 25 million Euros every year in its Indian operations. "The Indian market has continuously gained in importance for Bosch over the past few years," Dr Bohr said.

Dr Bohr, who is also in charge of Indian operations, said the company plans to develop its existing Indian companies including MICO into research and development competence centres and manufacturing hubs as part of the group's international development and production network.

These investments have been planned on the back of the Government's decision to gradually introduce Europe-equivalent emission standards for the entire country. By 2005, equivalent of Euro II will be standard in the entire country, while equivalent of Euro III will be introduced in the metros. Bosch also expects a significant growth in diesel cars in India over a period of time.

The group also plans to invest around Rs 85 crore in setting up a new software facility apart from increasing manpower in its software business in India. Currently, the existing software centre houses 1,600 engineers.

With the setting up of a new building, around 1,600 more will be hired over a period of time.

Nearly 450 engineers are currently working on the development of diesel technology. Bosch has already invested around Rs 50 crore in the software centre.

Dr Bohr said the high-pressure pump for the common rail systems would be produced in Bangalore while injectors will be built in Nashik. The first common rail systems are scheduled to come off the production lines by 2006. MICO also plans to export one million units of injector parts, around three lakh pumps and 1.5 million of other components of the system over a period of time.

Its Managing Director, Dr Albert Hieronimus, said 17 per cent of total sales in 2003 was from exports, which is projected to be the same during the current year too. The common rail systems produced in India will carry the Bosch brand and will initially be exported to Asian countries. The initial local content in the common rail systems will be around 40 per cent.

Dr Bohr said the company expects to grow the non-automotive business as well, which currently contributes around 10 per cent of its total sales while the rest constitutes the automotive business.

Sales of Bosch group, which holds 60.5 per cent stake in MICO, in 2003 were 413 million euro, of which 361 million euro was from automotive technology.

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