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Bosch Revs Up in India

  • Why it matters

    Why it matters

    With dwindling markets in the West, car parts supplier Bosch is pinning its hopes on the developing world, where motorcycles are more a source of earnings than a hobby.

  • Facts

    Facts

    • Bosch’s automotive division, which includes motorbikes, had sales of €30.6 billion ($39.1 billion) last year.
    • The Indian market for motorcycles has grown 14 percent in the past five years.
    • Bosch is looking to introduce a motor-control system that’s five times smaller than the current system.
  • Audio

    Audio

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The head of Bosch has a passion: Volkmar Denner loves motorcycles. When he takes his BMW machine out of the garage, his eyes light up – even when he is only talking about it. His weakness for motorcycles has not yet been handed down to the next generation of the family, however. “Unfortunately,” he laments.

The Denner family is typical that way. In Germany, the average motorcycle rider is over 40, and fewer and fewer 18-year-olds are getting a license to drive them. Young rebels who once blazed along the autobahn now seem to prefer a more a sedate ride.

But that is not the case globally. The worldwide market for combustion-engine motorcycles is expected to grow from 60 million today to 110 million by 2020. Mr. Denner is keen to tap into it.

Until now, the world’s largest auto parts maker has concentrated on safety technology when it comes to motorcycles, such as anti-lock braking systems or stability programs for high-end bikes. But now, with newly designed engine parts, Bosch is betting on a motorcycle boom.

“This is a market worth billions,” said the 57-year-old Mr. Denner.

For Asia in particular, the company has developed new fuel-injection and control technology to replace traditional carburetor systems. The argument for it is that motorcycle engines that are 250 cubic centimeters or less require 16 percent less fuel. And Mr. Denner will take pleasure in the fact that acceleration from 0-to-60 kph is faster by a fifth than larger systems.

The company, headquartered near Stuttgart, is paying special attention to India. “Here the motorcycle is not a piece of sports equipment, but a means of transportation with which money can be earned,” said Bosch divisional manager Stefan Kampmann. In India, the market for motorcycles has grown 14 percent in the past five years. Bosch estimates that by 2020, the figure will climb to 28 million vehicles per year.

“In India the motorcycle is not a piece of sports equipment, but a means of transportation with which money can be earned.”

Stefan Kampmann, Bosch

Unlike China, the electric motorcycles that Bosch also markets in India are not subsidized by the state, and as a consequence are not widespread. That’s why Bosch is directing its efforts toward improving combustion technology.

“Without a doubt, the potential is there. In contrast to… simple carburetor technologies, however, robustness will be crucial in achieving success in the mass market,” said Jochen Schilcher, a partner at the Munich consulting firm Berylls.

Another big hurdle: Electronics are not as easily repaired by the driver. Mr. Schilcher believes electric motorcycles will only be accepted by customers in developing countries if the technology functions reliably over the long term and requires no additional repair costs.

Bosch already has a key customer for its new systems, but has not yet said who it is.

bosch

At the end of next year, a motor-control system will be launched on the market. At about the size of a credit card, it is five times smaller than the present system. Then, by the end of 2016, fuel-injection valves will be introduced that are smaller by a third than current versions. Specifications and software developments are coming from India.

Mr. Kampmann emphasizes the importance of simple system solutions. But simple doesn’t mean primitive. He points out that India has an outstanding mobile-telephone network. So Bosch will offer Bluetooth interfaces and connectivity-control systems that can link the motorcycle to a smartphone. Possible applications are an expanded on-board computer, diagnosis through an electronic motor-control system and an anti-theft device.

In India, the cheapest motorcycles with 100 cubic centimeters cost only €500, or about $640. Bosch hopes to make an average supplier share of between €60 and €70 per vehicle. Discussions are already underway with Japanese manufacturers that are strongly represented in the Indian market.

Bosch already has experience of the low-price automotive sector. The company is the largest supplier for the Indian mini-car Tata Nano.

Motorcycle technology is part of the automotive division at Bosch. The automotive division, with sales of €30.6 billion ($39.1 billion) last year, contributed 66 percent to the company’s overall revenues.

 

The author is a reporter based in Stuttgart and has covered Bosch and other car part suppliers throughout his career. To contact the author: buchenau@handelsblatt.com

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