CEO’s Take On 2024: Demand for feature-rich, safe, connected and electric vehicles to drive auto parts industry, says Bosch India chief – ET Auto

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Guruprasad Mudlapur, President- India, Bosch Group, and Managing Director, Bosch Limited

Edited excerpts:

Q: After two consecutive years of swift growth in the auto component industry’s performance, what is your outlook for 2024?

While there has been rapid growth in the Indian auto component industry in recent years and several factors paint a promising picture for the future as well, it is expected to show a natural moderation in 2024. A high sales base in 2023, upcoming elections, and ongoing global uncertainties like the Red Sea crisis, the conflict in West Asia, the Russia Ukraine war and the generally depressed advanced economies are all contributing to this year’s anticipated moderate growth.

However, strong underlying economic conditions and high growth in sales in key segments are likely to provide a solid foundation for continued advancement in India. In the upcoming years, India will also emerge as a key auto component export hub and that’s a great opportunity for the industry.

At Bosch India, we are enthusiastic about the opportunities presented by the significant electrification trend in the domestic commuter scooter segment and passenger cars and are actively contributing to this exciting transition. We look forward to the introduction of the upcoming emission norms for off highway vehicles (TREMV) and are preparing ourselves for the introduction of hydrogen in heavy commercial vehicle segments.

Q: What are the key micro and macro indicators that will play an important role in shaping up the automotive industry in 2024?

The automotive industry is in transition. Technological changes, coupled with business model changes are leading to a perfect recipe for overall value chain disruption in the auto component industry. Globally, as EV penetrations continue to increase, the component industry is focusing on adding scale on one hand and grappling with severe cost issues on the other.

The Indian economy has demonstrated remarkable resilience in the face of shifting global dynamics. While tighter monetary policies create external challenges, India’s GDP growth is projected to remain strong, surpassing many other global economies. This resilience, coupled with rapid digitization, presents significant opportunities for the auto-component industry as well. We anticipate substantial growth potential in supplying to OEMs’ and this could result in vendor diversification.

Additionally, global Tier-1 and OEMs are increasingly outsourcing, opening doors for strategic partnerships – a path we are also actively pursuing. This multi-faceted strategy positions us for sustainable growth in an industry defined by innovation and evolving consumer preferences towards premiumisation. It’s also important to acknowledge the rising influence of startups in the automotive landscape. Their focus on electrification, connectivity and driver assistance will also contribute to the transformation of the automotive industry.

Q: What is your view on the readiness of the component industry for the shift towards adoption of multiple fuel technologies and electric vehicles (EVs) in 2024?

Technologies are rapidly evolving in the automotive space. Hybrids, EVs and Hydrogen vehicles will be the technologies for the future. Of course, we expect ICE vehicles (including flex fuel) to continue to be dominant for a long time to come. In view of this, it is critical that we can support multiple technology options for our OEMs.

We believe the component industry is quite ready to support the OEMs in this evolving landscape during 2024. EVs are yet to reach mass market volumes, but it is a matter of time before this happens, and several auto component players are already working to provide solutions.

At Bosch, we are very well prepared to support our OEMs with advanced technology solutions. We are also investing heavily in localisation, development of supply chain and in manufacturing to ensure that we have optimum cost points for the Indian OEMs.

Q: What will be the key technologies that will shape the next decade of the auto component industry?

Consumers’ preference for feature-rich, safe, and premium vehicles across segments, coupled with significant growth in driver/rider assistance and connected technology adoption will pave the way for enhanced safety and convenience in passenger vehicles and continued electric vehicle penetration despite potential subsidy adjustments. Committed to this vision, Bosch is actively exploring solutions in alternative fuels like hydrogen engines, advanced driver-assistance systems for autonomous driving, and connected car technology, aiming to create a future of sustainable, safe, and exciting mobility experiences.

Q: Do you think the Indian auto component industry has the potential to become a global manufacturing hub and play an important role in the global value chain?

While our share of exports is still very low, the Indian auto component manufacturing industry today is seen at par with other markets, due to technology advancements and localization efforts in India. On the global front, exports are projected to surge in the coming years, focusing on key markets across the globe. This demonstrates the industry’s growing competitiveness and aligns with OEMs’ diversification strategies. Improved margins are expected for manufacturers as raw material costs stabilize and capacity utilization rises. Overall, the Indian auto component industry exhibits remarkable resilience and is strategically positioned for sustained global growth.

Q:What are the key factors that work in favour of India and what limitations do we have as a country?

In the automotive space, India is a large, growing market with an aspiring middle class looking for cost-conscious, high-quality products. As a nation, we are good at adopting technologies. The pace at which we have adopted digital technologies is noteworthy. The manufacturing base is large, very well localised, and capable of meeting global quality and cost norms. India is also taking steps towards becoming an export hub in certain auto-components which further ensures a push towards localization.

I see India having a diversified powertrain mix with both traditional and new-age fuel technology coexisting, moving away from a one-size-fits-all approach. Indian automobile industry’s movement towards new powertrain technology mix will also help cater to global market needs. In passenger cars, we see a shift from diesel engines towards a mix of gasoline, electric, and potentially hydrogen fuel cell options; similar trends are observed in the EU as well.

While diesel remains dominant in commercial vehicles, we expect a change with promotion of various schemes by government like PLI, with the introduction of hydrogen engine technology. Bosch too, is prepared to offer a variety of solutions across these categories, including diesel, gasoline, natural gas, flex-fuel, electric, and hydrogen engine vehicles, to cater to the specific needs of different regions. When it comes to our limitations, bridging the skill gap and ensuring policy stability along with consistent reforms will be crucial for long-term success.

Q: What is your vision for 2030 for the auto component industry?

In India, towards the next decade for the auto component industry, Bosch envisions a path driven primarily by technological innovation and localization. Increasing local demand basis expanding middle class, digitalization, high levels of localization, sustainable eco-systems, alternate fuel technologies, advanced safety features etc. all point towards a highly robust and competitive auto component industry. At Bosch, we aim to position ourselves as a preferred partner of choice for advanced mobility solutions and services.

Recognizing the vast potential of alternate fuel technologies and EV, Bosch will strengthen its portfolio through strategic localization and partnerships, to shape a new era of mobility. Our commitment to understanding economic dynamics and consumer preferences reflects a customer-centric approach, while our pursuit of intellectual and strategic partnership showcases our dedication to long-term success in the dynamic Indian automotive landscape by 2030.

We envision the Indian auto component industry to be a global leader in innovation, quality, competitiveness, and sustainability by 2030 and to support the growth of the automotive sector and the economy as a whole.

  • Published On Mar 11, 2024 at 07:40 PM IST

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