Press

• The Bosch Group will generate more than 50 billion euros in sales in 2011
• Automotive technology sales will exceed 30 billion euros
• Fehrenbach: "making accident prevention and environmental protection affordable everywhere"

Frankfurt/Main, Stuttgart – “The business cycle may have passed its peak in the first half of the year, but that does not mean collapse is imminent and it certainly does not warrant hasty overreaction. We are still expecting five percent growth in global automotive production in 2011.” This was the analysis with which Franz Fehrenbach, the chairman of the Bosch board of management, opened his press conference at the 2011 Frankfurt International Motor Show.

As Fehrenbach told the international media, these economic developments suggest at most a need to be more vigilant. According to Fehrenbach, growth in the automotive markets of emerging countries has recently seen a slight slowdown. Nevertheless, the emerging markets in Asia and South America will continue the process of catching up to the established markets beyond this year.

The Bosch Group expects ten percent growth

Against this backdrop, the Bosch Group is expecting growth to slow slightly in the second half of 2011 for its Automotive Technology, Industrial Technology, and Consumer Goods and Building Technology business sectors.

But sales are nevertheless expected to increase by ten percent. “We remain confident that the Bosch Group’s sales will top 50 billion euros for the first time,” said Fehrenbach. At the same time, automotive technology sales are expected to exceed 30 billion euros.

Growth at Bosch is having a positive effect on employment. Fehrenbach is expecting the Bosch Group's workforce to grow by 15,000 to more than 300,000 associates this year, with employment in automotive technology growing by 10,000 to around 177,000 associates.

Bosch is committed to investing considerable sums in its future. With 3.3 billion euros for research and development in the area of automotive technology alone, the R&D ratio for 2011 is over ten percent. “This is our upfront investment in helping to shape the structural change of the automotive industry,” said Fehrenbach.

Structural change in the automotive industry

The structural changes facing the automotive industry are of particular concern to Bosch as a global supplier. For Fehrenbach, the primary issue is not absolute growth in global automotive production, but how this growth is distributed across regions and segments. The chairman went on to list the central aspects in this.

First and foremost, automotive production is continuing to shift to Asia’s emerging economies. Despite the volatility in business cycles, those markets are remaining dynamic – and the scope for catching up in individual mobility is as enormous as ever. As things stand at present, India's vehicle density has only reached one-fiftieth of western Europe's, and China’s one-fifteenth.

But as they catch up, it is in Fehrenbach’s view above all small, low-price vehicles that will predominate. As a result, over this decade global automotive production will grow strongly in terms of units produced, while growth in terms of value will be weaker.

At the same time, technical demands are rising in all markets, Fehrenbach said. Even small, low-cost vehicles need to meet tightening emissions and fuel-consumption standards around the world. But the most important factor is the demand for safety.

For instance, the United Nations has proclaimed the Decade of Action for Road Safety – and in this respect Bosch’s strategic imperative “Invented for life” is spot on. Fehrenbach: “We are doing our utmost to make accident prevention and environmental protection affordable everywhere.”

According to the chairman, the automotive industry must ultimately make sure it is ready for new technological departures – whether they come in the move from partly autonomous to fully autonomous driving or in the transition to electromobility. And that is the biggest challenge facing car makers and automotive suppliers.

It takes a wide range of systems expertise to make the relevant solutions ready for market – expertise that Bosch, by virtue of being a diversified company, has at its disposal. “That's what makes us a driver of structural change,” said Fehrenbach.

Increasing activities in Asia

The Automotive Technology business sector is stepping up its activities in the Asian growth region. Despite the crisis, it has managed to increase its annual sales by half compared with 2007 levels. By the end of the year, almost 10,000 of the 29,000 engineers it employs around the world will be based here.

It is here that it sells almost one in three of its diesel systems, and here that it will be investing another 1.5 billion euros between 2011 and 2013. Its commitment to the region extends to the area of dealers and repairs: the one-thousandth Bosch Car Service in China opened this summer.

But as Fehrenbach pointed out, developing cost-effective solutions that meet the local needs of the growth regions is essential. The Parkpilot parking assistant, for instance, is already a resounding success in China.

A global objective: increased energy efficiency

Around the world, a clear objective for both gasoline and diesel engines is to reduce fuel consumption and carbon dioxide emissions. Bosch offers the technology to reduce both figures by around a third in the latest generation of engines. In 2013, Bosch plans to sell 7.2 million gasolineinjection systems – three times as many as in 2010.

Over the same period, sales of the common-rail diesel-injection system are set to rise from nine million units per year to over twelve million units. This kind of technology is lessening the environmental impact of the increase in mobility. “To us, developing ecologically sound technologies makes economic sense,” said Fehrenbach.

One example of ecologically sound technology is electromobility powered by renewable energy sources. Bosch is currently investing 400 million euros annually en route to the electric vehicle – above all in traction batteries, electric motors, and power electronics. By 2013 the company will be delivering products from its electromobility portfolio to almost 20 projects for twelve automakers.

Bosch focuses not only on environmental protection but also on accident prevention. As a result of government requirements, the safety systems that Bosch brought to market first are seeing rises in their installation rates Page 4 of 5 between 2010 and 2015: for the ABS antilock braking system the rise is from 76 to just under 90 percent, for the ESP® anti-skid system it is from 41 to almost 60 percent.

Moreover, said Fehrenbach, the automotive industry must aim to make the vision of accident-free, autonomous driving a reality. The development of the required assistance functions is gradually progressing, reaching ever higher speed ranges and more complex driving situations. Bosch has over 600 engineers working on these topics.

Mobility solutions for the traffic of the future

New functions that are emerging from greater networking of the car with its surroundings are enhancing vehicle safety, increasing comfort and convenience, and making mobility more efficient. Bosch is putting a lot of effort into car-to-x communication, where cars communicate with each other and with their environment.

The aim is to warn drivers quickly of critical traffic situations or potential dangers. The company is also working on infrastructure solutions to support electromobility. With a pilot project in Singapore, Bosch is testing a service platform that will link the drivers of electric vehicles with service providers, energy suppliers, or parking operators, with the aim of making mobility efficient and comfortable.

In all its development work for the mobility of the future, Bosch is adjusting to the increasing uncertainty in economic circumstances. According to Fehrenbach, the automotive supplier and the automotive industry as a whole must overcome volatility in business cycles and press on with its major innovation projects.

Partnerships for innovation between producers and suppliers have always depended on reliability – but in uncertain times, it becomes even more important. “At Bosch, this goes without saying. Our partners can rely on us,” said Fehrenbach, to conclude the press conference at the Frankfurt International Motor Show.

Contact person for press inquiries:
Thomas Knoll, phone: +49 711 811-7088

PI 7496 - 13 September, 2011