BENGALURU: Leading Auto Parts’ maker Bosch expects to Invest around Rs 1,000 Crore on a Yearly Basis for the Next Few Years on Plant & Machinery, including the Transition from BS-IV to BS-VI Emission Standards.Bosch Ltd Managing Director Soumitra Bhattacharya told that Production of some of the Mechanical Products will be Reduced because of the Transition. He also said around 3,000 will be Hired this Fiscal.“For Instance, the Line Pump which we Produce here are Important for Tractor Makers, while for Buses & Trucks, it is not. The Tractor Production Peaked at 6.9 Lakh Units in 2013 & it is still at around 6 Lakh Units which is not a Small Volume,” Bhattacharya said.
The Government has Announced its Plans to Skip BS-V norms & has asked the Industry to Comply with BS-VI Emission Norms by 2020.
Bhattacharya, who took over as the Managing Director of Bosch in January, said some of the Products will be Imported & they will be Localised.
“Bosch always had an Intelligent & Phased Manner of Localisation. It doesn’t make sense to have a 100 % localisation. As we Develop our Vendor Base, the Components will be Localised in Agreement with our Customers.”
An Analyst Report from ICICI Securities said Bosch being the Leader & with Technological (R&D) Support from its Parent is Well Prepared to Cater to the Industry.
“The Advancement of Emission Norms would, however, Require Bosch to have Higher-than-Expected Investment & Higher Import Content from its Parent, which could Increase its Cost thereby Impacting the Margins.”
The report also said BS-VI Norms in 2020 will Bring Revenue Opportunity from the 2-Wheeler Space (where Traditional Carburetor will be Replaced by Injection Systems) that could further Drive its Growth. It currently Caters to 4 2-Wheeler OEM’s & its Systems are Fitted in Premium Bikes.
Bhattacharya also said the scrappage Policy if Implemented will be Good for the Industry. He said the Government was well aware of the Muted Growth of the Automotive Industry & will Probably take that into Consideration while Framing Further Policies.
He said his Company is Working with a few Consortium’s on Smart City Projects.The ICICI Securities report said Bosch with its Strong Technology Leadership & Market Share of 70 % will Benefit from Good Harvest Season & Higher MSP Prices will continue to have Strong Traction in the Tractor Volume.
The Growth in Commercial Vehicles (Scrappage Policy & Pre-Buying due to Emission Norms) & Passenger Vehicles (Positive Impact of Pay Commission & New Launches) will Benefit Bosch.