STUTTGART - Europe's carmakers switched to more efficient direct-injection diesel engines faster than expected last year. Resources at Robert Bosch GmbH were stretched as the German supplier fought to keep up with demand for its direct-injection diesel systems.
The extra investment required was a major factor in the company's depressed 1998 results, said Bosch Chairman Hermann Scholl. Operating profit fell 30 percent to DM1.8 billion (euro 912 million, $967 million) last year.
Bosch has spent DM800 million expanding its diesel engine management production capacity, mostly in Germany. This is equivalent to 11 percent of its diesel systems revenue.
It expects to invest a similar sum this year. DM175 million will be invested in Unit Injection System (UIS) capacity at the company's plant in Rodez, France, by 2000. Total employee numbers in Bosch's diesel business rose by 3,500 to 20,600 in 1998. In Germany alone, 200 development engineers were added.
Scholl said he expected diesel-engined models to make up 27 percent of European car production this year - 2 percent more than in 1998. Four years ago, diesel engines had a 22 percent share of European production.
Direct injection made up 50 percent of Europe's diesel car production in 1998. 'It will be 65 percent this year, rising about 85 percent in 2000,' said Scholl.
Direct-injection engines offer better fuel consumption and are also more powerful, cleaner and quieter, said Scholl.
The first Bosch high-pressure direct-injection gasoline engines systems will be introduced at the end of the year.
Bosch expects 1999 sales growth of around 4 percent to DM52 billion. Sales in 1998 rose to DM50.3 billion from DM46.8 billion the year before.