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Bosch Targets Tripling Asian Sales by 2015; “Significantly” Growing Business With Asian Automakers

The Bosch Group has set itself a target of €22 billion (US$31 billion) in sales in the Asia-Pacific (A-P) region by 2015, which is projected to represent 25% of total sales. For 2007, Bosch expects its A-P sales to climb 8.5% from 2006 to €7.4 billion (US$10.5 billion). Between 2008 and 2010, Bosch plans to invest €1.4 billion (US$2 billion) in Asia in addition to the €1.4 billion already invested in the region between 2005 and 2007.

We are strengthening our presence in Asia above all because we want to significantly grow the business we do with Asian automakers,” said Franz Fehrenbach, chairman of the Bosch board of management, at the opening of Bosch’s new South Korean headquarters in Seoul.

In the next few years, half of global GDP growth will be accounted for by the countries in Asia Pacific. By 2015, the region’s economic output will reach the level of Europe and North America. By that time, it is estimated that the region’s population will total some 4.4 billion. The growth in the global autofleet is expected to be coupled with stricter environmental standards. Bosch thus anticipates that efficient injection systems will increasingly be deployed in the countries of Asia—an “especially” good opportunity for the clean diesel, as well as for sales of economical gasoline systems.

Bosch also sees an increase in demand for safety systems, with demand for braking systems such as ABS and ESP gradually becoming established. In Suzhou, China, Bosch is currently expanding its production of control units for airbags, ABS, and ESP, at a cost of roughly €100 million. Also in China, the company took Asia’s largest winter test circuit into operation just a few months ago.

In the future, Bosch expects that by far the largest share of cars manufactured in Asia Pacific will continue to be made by Japanese, Chinese, South Korean, and Indian automakers. Today, the figure is roughly 93%. This also means that the low-price vehicle segment—cars with a net price of less than €7,000— will become even more significant, according to the company.

Bosch expects that low-price vehicles’ share of the global automobile market will be in excess of 15% by 2015. This translates into annual growth of roughly six percent: twice the rate of the automobile market as a whole. Bosch has already developed products specifically for this market: its Value Motronic, for example, is a particularly cost-effective control unit platform for gasoline engines with two, three, or four cylinders and port injection.

Bosch also sees a booming business opportunity in expanding infrastructure, modern building technology and market-driven consumer goods in the region, in addition to transportation.

Between 2006 and 2015, the average investment rate in the A-P regionregionpected to grow by just under nine percent per year. By 2015, just under 45% of the roughly €13.5 trillion of total global capital expenditure will be spent in this region, according to Bosch.

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