New Delhi Auto parts maker Bosch India expects its mobility business in the country, which accounts for 85% of its revenue, to grow this financial year despite various supply chain and inflationary disruptions. Bosch India Chairman and Managing Director Soumitra Bhattacharya said the local arm of Germany’s Bosch Group is also working on new technologies such as electric vehicles (EVs) and hydrogen fuel cells, as the country transitions to clean mobility in the next decade. Is. an interview. Edited excerpt:
Usually, when technology changes, a new set of suppliers emerge. As EVs become more mainstream, how will companies like Bosch India and those involved in the automotive supplier ecosystem participate?
Within EVs, two wheelers, three wheelers and four wheelers are separate markets. Our parent Bosch today has an acquisition value of €20 billion in electric vehicles – one of the highest acquisitions by a single supplier. So, our parents are very capable of electrification. Second, Bosch has invested more than €5 billion in EVs every year, between €400 million and €500 million, over the past 10 to 12 years – a lot of investment in R&D and upfront expenditures to be prepared. for EVs. As a policy, we will not manufacture the cell, but we do make everything else in terms of EV parts – batteries, individual components or e-axles. We also use our parents’ abilities to transfer knowledge and technology. We’ll do some business initially, and we’ll certainly move quickly into localization. Over the past four years, we have launched our EV project located inside Bosch Limited, so the EV, hydrogen and electrification will all be by design at the listed company. We have created a large portfolio for the growth of a Public Listed Company.
How long will it take to deploy alternative technologies like hydrogen and EVs on a large scale? What is your acquisition pipeline in EVs?
The EVs being produced and sold today constitute a very small percentage of its total business. It occupies between 1% to 2% of the car market. However, we expect EVs in India to grow to 30% or possibly 25% of total volumes by 2030 in the best case scenario. We’ll participate in this transition partly through trade, then through partial localization, and then full localization under the entire EV range that we can do, except for the cell. That being said, for four wheelers, the same applies to two wheelers. In the case of two-wheelers, we have acquired a few projects like TVS iQube and Bajaj Chetak. We are also set to announce on our e-three-wheeler acquisition. So, we are ready for two wheelers and three wheelers, and we are very ready for four wheelers in EVs. Similarly, we are prepared for hydrogen, which will be more applicable for M&HCV over the next seven years. We will transition to a hydrogen internal combustion engine and then a hydrogen fuel cell EV first.
How do you see the impact of the fresh Covid outbreak in China and the disruptions caused by the prolonged Russo-Ukraine war?
Today you must imagine a world where planning is not possible. Uncertainty is the only certainty in the long run, and one has to think in short cycles while having a long-term outlook. In the past few years, supply chain challenges in the automotive sector or the mobility sector were dominated by semiconductor shortages, which will continue into FY13. Supply will start to decrease gradually in 2024, but will continue until 2023. Second, due to China’s lockdown and the Russo-Ukraine war, energy prices and cost inflation have risen. And due to the demand-supply mismatch, raw material prices have also increased, resulting in an increase in electronics price logistics costs. While the RBI has taken a bold step by raising the lending rate by 40 bps, inflation is likely to rise and inflationary pressure will be put on the consumer. It will have an impact, but I am optimistic about India’s growth story, albeit at a slightly slower pace.