“We have to regain the credibility the industry lost”
It was Dr. Volkmar Denner's second visit to India since he became the top boss at Bosch, the world’s biggest automotive component manufacturer. It could not have come at a more remarkable time. The Dieselgate scandal of 2015 has just taken a turn for the
How are you preparing for a future where the internal combustion engine would be a minority in your overall portfolio while hybrids and electric powertrains would enjoy a majority?
This is something we have to prepare for and that is what we did. For many years we have kept investments very high in electric mobility. Not many people know or realise that Bosch is already the market leader in the largest electric vehicle market in the world – China. So, we do everything to prepare ourselves for the electrified future and we believe in an electric future. We also entered new markets in this area like twowheelers. From bicycles to scooters, we have been very active since many years. We believe in the electric future. But we are also convinced that the industry and, hence, Bosch too, needs an adequate transfer period. There has to be a balance of this shift so that we can ensure adequate employment in the industry. If it happens too fast, then it would be a problem. But if there will be a transition phase where we have a possibility to adjust, then for Bosch, as a technology leader, there are more opportunities and chances than threats.
In the backdrop of the Dieselgate scandal, Bosch has been a vocal supporter of the technology, even displaying how new-age diesel engines emit far less NOx emissions than what has been prescribed. Yet, do you feel that it is a lost cause and regulators have already made up their mind against diesel in particular and combustion engines in general?
In addition to being the Chairman, I am a scientist at heart. So, I believe in and go by facts. At present, very clearly, there are many emotions on this issue that dominate discussions and it is very clear that the industry has lost a lot of credibility in the process. We have to regain that credibility. At the same time, if we look at facts, we have shown to the world at large recently that there is no deficit in technology. We can make diesel engines using the current technology that has very low NOx emissions on the road. The question is how you use the technol- ogy and we have shown that if it is used and applied in a proper way then very low NOx emissions can be achieved with diesel engines. From that point of view there is nothing that works against diesel engines. We also have an obligation with respect to climate change and that is CO2 emissions. There we have to look into total CO2 emissions from well-to-wheel, so we look at how we generate the electricity. This part is often neglected. We need very demanding CO2 emission targets as well that will necessitate diesel engines, too.
Given the credibility crisis with the industry, are governments ready to listen when you say diesel can still be very clean?
This is a question of credibility and an emotional issue. That is why I say we should also look at the facts. Okay, you do not want to believe us as an industry, but you should listen to statements that researchers and scientific communities are making. We want to help keep people mobile while improving air quality around the world. We’re making heavy investments to achieve this – and it’s paying off. A few weeks ago, we announced our breakthrough in diesel technology – Bosch engineers have succeeded in bringing NOx emissions down to just 13 milligrams of nitrogen oxide per kilometre in road tests, according to the new European RDE standard. Our new solutions will not make diesel engines more expensive. Everything we have fitted to our test vehicles to reduce emissions is close to entering production – no additional hardware components are needed. We are pushing the boundaries of what is technically feasible, but by refining existing technology. For customers, diesel will become a low-emission technology, but will still be affordable. This does not mean Bosch is voting against electric mobility. On the contrary we want to take it further, but there has to be a transition period where various powertrains would coexist. You cannot switch off one technology and switch on another overnight.
Is there juice still left in the combustion engine?
One important trend we see, both worldwide and here in India, is the coexistence of powertrain technologies. With India leapfrogging from BSIV to BSVI, Bosch India, in collaboration with OEMs, is geared up to achieve BSVI from April 2020. The internal combustion engine will continue to be the mainstream solution for freight and passenger vehicles. At the same time, hybrid technology will be a vital stepping stone towards electrification in India, particularly due to the prevalence of stop-start driving due to traffic congestion. Where combustion engines are concerned, we believe the key to making them more eco-friendly lies in synthetic or carbon-neutral fuels, whose manufacturing process captures CO2. In this way, this greenhouse gas becomes a raw material, from which gasoline, diesel, and substitute natural gas
can be produced with the help of electricity from renewable sources. Ultimately, we believe that the coexistence of combustion engines and electrification with hybridisation is an interim solution on the road to an electric future. For this very reason, Bosch has invested €400 million (`3,195 crore) every year since the beginning of this decade in electro mobility. Currently, there are more than 8,00,000 vehicles on the road worldwide that contain Bosch components for electrified driving.
Do you think the Government of India’s ambitious plan of having all electric vehicles on the roads by 2030 is feasible?
It is far too short a time-frame to prepare for 100 per cent electric vehicles. First, you have to stabilise the electrical grid and build charging infrastructure for all these vehicles. It is a complicated system optimisation and you have to look at the whole value system. Is the grid prepared and what kind of electricity does it produce? It really is about last-mile connectivity. Somebody has to up and maintain the charging infrastructure. Having said that, electrification in India is expected to gain momentum via fleet operators, for which the pre-requisite is shared and connected mobility. In view of this, we believe it will take off much more rapidly in small-vehicle segments.
What potential do you see for Bosch in India?
India continues to offer promising opportunities for our business and broad product range. According to the latest global data, India has overtaken Germany to become the fourth-largest automotive market in the world. Automobile sales in Asia’s third-largest economy, including passenger and commercial vehicles, grew 9.5 per cent last year. In 2017, the Bosch Group registered total sales of around 2 billion in the Indian market – this is a solid 15.4 per cent growth in euro terms. With such a promising future for the automotive market in India, we are confident about our continued growth here.
The real story for us in India is the transformation of Bosch into a leading IoT company. We have been investing heavily to drive this forward. Our Adugodi location is being revamped from a manufacturing facility into a technology hub. Over the past three years, we have invested more than ` 370 crore ( 46.2 million) to create this smart campus, which is home to 3,650 of our 18,000 engineers in India. Additional investments of ` 600 crore ( 75 million) are planned for further expansion of Adugodi. In terms of new business, last year, we set up a state-of-the-art artificial intelligence centre in Bengaluru, and our newly established Connected Mobility Solutions division is active in India, too, where it is helping shape mobility of the future. Over the next three years, we plan to invest an additional ` 1700 crore ( 220 million) in India in total.
Many companies also use India as a hub for R&D. Even in Bosch, India is your biggest R&D centre outside of Germany. Are you planning to build on that?
India plays a very special role for Bosch. Our Indian engineers are currently developing a global telematics platform enabled by our local engineering and manufacturing set-up. This platform offers end-to-end solutions, including our connectivity control unit, integration of mobile network operators, development and operation of cloud-based services as well as smartphone app development and support for back-end solutions. Bosch India serves a global customer base through the telematics platform. It’s a good example of how we are harnessing local expertise to offer cutting-edge innovations for the global market – an approach we call “local for global”. Our newly established connected mobility solutions division will also help us serve growing demand for mobility in India. Bosch is shaping the connected future not only in the mobility domain. We have recently added new teams in India to drive the development of solutions for the IoT, which are tailored to local needs.