Auto-parts supplier to quadruple China sales
By Xiao Xie (China Daily)
Updated: 2004-06-11 08:54

World-leading automotive parts and components supplier Robert Bosch GmbH plans to cash in on China's fast-growing auto sector by quadrupling its sales in the nation by 2012.

The company plans to lift its sales to 5 billion euros (US$6 billion) by 2012 from last year's 1.3 billion euro (US$1.56 billion).

Bosch will expand its existing production facility, build new factories and seek acquisition and merge opportunities to help it meet this ambitious target, said Peter Pang, president of Bosch (China) Investment Ltd.

"We want to maintain our leadership in the industry," said Pang.

Bosch announced that it will establish a joint venture in Wuxi in East China's Jiangsu Province to produce common rail systems - a diesel fuel injection system in auto engines - for local Chinese customers, an important aspect of its expansion plans.

The project, which awaits government approval, will be the firm's largest overseas investment, totalling 411 million euros (US$493 million).

Production of the joint venture is due to start this summer.

Bosch Group holds a 67 per cent share in the venture, with the Wuxi Weifu Group taking the remaining 33 per cent.

Bosch also plans to establish a 50 million euro (US$60 million) technical centre in Wuxi by 2005.

"Our partnership with Wuxi Weifu is yet another exciting opportunity for Bosch to further extend its leadership in the China market through expansion of our production capabilities for providing the efficient and clean diesel technologies," said Christoph Kirsch, general manager of Bosch Automotive Diesel Systems Co Ltd.

Kirsch said China's automobile market presents huge opportunities for Bosch's expansion in China.

Huge growth potential exists for auto firm's investing in China, as the nation's average car ownership is 0.5 per 100 people, as compared with 55 in Germany and 80 in the United States.

Bosch has three main business divisions in China - customer/building technology, industrial technology and automotive technology. The automotive business accounts for more than half of the company's total revenue in China.

The company will increase its exports by expanding its production capacity to take the advantage of China's lower labour costs, according to Pang.

"We have strong plan for export," said Pang. "But we are now too busy to meet domestic demand."

Bosch also plans to expand its auto service network and has also launched a campaign to expand the Bosch Car Service (BCS) network which aims to set up 200 new service stations throughout China by the end of this year.

Bosch plans a massive rise in the number of Bosch Car Service network from the current 160 to 1,500 by 2013.