Bosch Automotive Technology: driving forward. innovation in established and emerging markets. Chairman of the Bosch Automotive Group,
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1 December 1, 2011 C/CCE-ca Bosch Automotive Technology: driving forward innovation in established and emerging markets Bernd Bohr, Chairman of the Bosch Automotive Group, at the Tokyo Motor Show Tokyo, December 1, 2011 Robert Bosch GmbH Postfach Stuttgart Corporate Communications Phone: Fax: Leitung: Prof. Uta-Micaela Dürig Presse-Forum :
2 Ladies and Gentlemen, Much has happened since we last met at the Tokyo Motor Show in The world economy and the global automotive industry bounced back from a major economic crisis. In 2011, political and economic developments in different parts of the world have given rise to new uncertainties. In the midst of all this, Japan has faced the task of rebuilding in the wake of last spring s earthquake, tsunami, and nuclear accident. The country and its people have mastered this challenge remarkably. Surely, the Bosch Group s strong global presence proved an asset last spring. By drawing on both local and global resources, we were able to deal with the situation in the best way possible. And this worldwide presence will be one of our biggest strengths as we take on the complex challenges ahead. In the years to come, the global automotive industry will have to make some critical decisions on several major issues: the tightening of fuel economy and emissions standards, the transition to electromobility, the vision of accident-free driving, and the need to keep the car attractive for the internet generation. Today, I will discuss the paths Bosch is taking in response to these challenges. But before I do this, I would like to take a brief look at the current situation. The global economy has cooled since the first quarter of The consolidation of public Page 2
3 finances in highly indebted economies has dampened growth. Emerging automotive markets have also recently experienced a slow down. Despite this, the catching-up process in Asia s emerging markets will continue for quite some time still. Global automotive production has grown some four percent in 2011, and we expect three to five percent growth in Against this backdrop, we remain confident that Bosch Group sales will top 50 billion euros for the first time in 2011, up from 47.3 billion euros in In Automotive Technology, we expect a business volume of over 30 billion euros, compared with 28.1 billion euros in And we continue to invest considerable sums in our future. In automotive technology alone, we will invest around 3.3 billion euros in research and development this year. Our growth in 2011 is also reflected in our global workforce. This year, some 15,000 new hires are expected to join the Bosch Group, bringing associate numbers to about 300,000. In the Automotive Group, headcount will grow by some 10,000, to around 177,000. In Japan, our sales levels are comparable to 2010 despite last spring's disasters, and are expected to reach some 330 billion yen in The number of associates working for Bosch in Japan has also remained stable at around 8,000. As a side note, 2011 marked the 100th anniversary of Bosch in Japan. Under normal circumstances, this milestone would have been commemorated with a gala. Following the earthquake and tsunami, Bosch Japan decided to reroute the funds originally Page 3
4 intended for the anniversary to support relief efforts. From June to November, teams of Bosch associates volunteered on cleanup and rebuilding projects. In addition to this, Bosch donated funds, container buildings, and power tools. Moving ahead, our activities in Japan will continue to play an important role in the Bosch Group's global development and production network. By the end of 2011, 1,200 Bosch engineers will be located here, and our Yokohama site is our largest R&D center for active safety systems outside Germany. It is also the Bosch global competence center for motorcycle safety. Our engineers here recently developed the world's smallest and lightest motorcycle ABS. The system has contributed to increasing motorcycle safety, and the industry has acknowledged the technology s significance. Not only has it succeeded in global automotive markets, it has also been awarded with safety prizes. Our development activities in Japan reflect a global Bosch Group strategy: by drawing on regional strengths, we have built a worldwide network of specialists who benefit from each others know-how and market intelligence. At 50 development centers in all the world's major economic regions, our engineers work in diverse international teams that develop specific solutions for emerging economies and the established markets. This set-up has put Bosch in an excellent position to support Japanese OEMs in all of their endeavors, both in Japan and in global markets. Bosch Automotive Technology continues to strengthen its presence particularly in the Asian growth regions, Page 4
5 where Japanese carmakers are increasingly expanding their automotive production. By the end of this year, Asia will be home to 10,000 of our global total of 29,000 engineers. And we plan to invest more than 1.8 billion euros in the region between 2011 and As Asia s emerging economies develop, demand for small, lowprice vehicles will continue to grow. In response to this trend, we continue to focus our efforts on developing affordable technologies that meet local needs. For instance, we have cut the cost of radar sensors for driver assistance systems by half within three years. Our low-cost Parkpilot concept for the Chinese market has been very successful and we recently introduced a navigation system there that is tailored to local requirements. We have also focused our efforts on reducing the cost of our diesel systems. Over the next five years, we will increase the share of injection systems fitted with cost-effective solenoidvalve injectors from just under 60 percent to almost 80 percent. Afterall, we sell one in three of our diesel systems in Asia. Making Bosch automotive technologies accessible and affordable everywhere is one of our central aims. Another is continuously improving Bosch technologies to make driving clean and economical, as well as safe and comfortable. This is in line with our strategic imperative "Invented for life". Using a broad range of technical measures, we are in a position to reduce the fuel consumption of both diesel and gasoline engines by another 30 percent. The turbocharging of downsized Page 5
6 engines is an important example, and the main focus of our Bosch Mahle Turbo Systems joint venture. These systems not only help comply with ever-tightening fuel economy and emission standards. They also contribute to the market success of our economical direct injection and port-fuel injection systems. We are planning to sell seven million gasolineinjection systems in 2013 three times as many as in Over the same period, sales of our common-rail diesel-injection systems are set to rise from nine million units per year to over twelve million units. Continuing to develop existing technology is only half the challenge. We must also respond to new technological demands whether they come in the move from driver assistance to fully autonomous driving, or in the transition to electromobility. Bosch invests 400 million euros annually in e-mobility. We offer a full portfolio of products, from motors and power electronics to auxiliary systems. We have also successfully entered the market for ebike drives, with 70,000 units delivered this year. And with SB LiMotive, our joint venture for lithium-ion batteries, we are working to increase the range and reduce the cost of this key component. Bosch has already achieved a number of goals on the way to powertrain electrification. By 2013, we will be delivering to 21 projects for 13 automakers. Today, our hybrid technologies are already featured in Porsche, Volkswagen, and Peugeot vehicles. All of this shows that we have taken decisive steps to prepare for an electric future. Page 6
7 We don't expect a major shift toward purely electric driving until the middle of the next decade. However, transitional solutions will likely be accepted before then. For instance, there is strong potential for small e-vehicles, especially for commuting in megacities. And we expect good opportunities for the plug-in hybrid, whose battery can be charged simply from a wall socket. Its all-electric range is sufficient for day-to-day urban trips, and its supplemental diesel or gasoline engine makes greater distances possible. As the number of cars on the world s roads increases, the importance of driving safety has also grown. Driven by government requirements for newly registered vehicles, the safety systems which Bosch brought to market first are seeing rises in their installation rates. By 2015, 90 percent of all new vehicles worldwide will be fitted with the ABS antilock braking system, up from 75 percent in During the same period, installation rates for the ESC anti-skid system will rise from 40 to 60 percent. In Japan, ESC will be mandatory for new vehicle models from Here, too, Bosch is supporting Japanese OEMs, both in their activities at home and abroad. Today, more than 30 percent of vehicles produced by Japanese carmakers are equipped with Bosch ESC systems. In the coming decades, technological developments will make the vision of accident-free, autonomous driving reality. At first, assistance functions based on radar and video sensors will support drivers in stop-and-go traffic. Gradually, driver assistance systems will be able to provide support in more complex situations. Bosch has dedicated more than 600 developers to this field. The road to autonomous driving is Page 7
8 essentially comparable to the transition to electromobility a topic which over 800 developers are working on. In this way, Bosch is confidently addressing the structural changes that the automotive industry faces. While focusing on economic and technological challenges is certainly decisive, we mustn't forget to pay attention to social change. Without doubt, vehicle networking is becoming an important factor in the purchasing decisions of the internet generation. This is reason enough for Bosch Automotive Technology to come up with internet-based mobility solutions. Our internet activities focus on a number of areas, including social media platforms for driver information, as well as the networking of vehicles with each other and the transport infrastructure. We are also developing e-mobility ecosystems. In fact, we are already implementing such a system in Singapore with an entire business model based on web 3.0, the internet of things and services. Trials began in June of this year. By the end of 2011, around 40 charge spots will have been installed across the city-state and more are planned. The heart of the project is our service platform, which makes it possible for drivers to make reservations and locate available charge spots. This will give rise to an environment in which energy suppliers, parking space operators, OEMs, and fleet managers can all participate. For drivers, the system couldn't be simpler: they pay a flat rate for electricity and service. Surely, this project provides a glimpse into the future of mobility. In all that we do, we are adjusting to the increasing uncertainty in economic circumstances. Despite a volatile business Page 8
9 environment, the automotive industry must focus on its major innovation projects. Partnerships for innovation between producers and suppliers have always depended on reliability. In an uncertain world, it becomes all the more important. At Bosch, it goes without saying. Our partners can rely on us. Page 9
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