GENEVA - Robert Bosch is 'greatly worried' by the demands for price cuts from automakers, said Chairman Herman Scholl.
In an interview, Scholl said suppliers have faced price reductions of 2 percent or 3 percent annually for the past decade, despite rising investment costs.
Bosch said it had invested DM5 billion (E2.53 billion) in research, development and manufacturing equipment for four new high-pressure diesel systems in the past five years.
'It is essential that prices paid must follow in line,' said a Bosch spokesman.
Scholl said that Bosch is currently involved in tough negotiations with vehicle makers to achieve prices that reflect the investments made, as well as rising commodity prices in the past year - particularly for electronics.
Bosch is the second-largest auto supplier in the world when ranked by revenue, and the largest auto supplier in Europe.
Scholl said that despite sales growth in 2000, operating income in the company's automotive technology division remained unsatisfactory.
Bosch sales grew 12 percent in 2000 to DM61 billion. A third of the growth was due to exchange rate gains. Most of the remainder resulted from internal growth.
Automotive sales accounted for 71 percent of Bosch's revenue in 2000. For 2001, Scholl expects another 5 percent in organic growth, despite an expected slowdown in global auto production.
Scholl said total revenue growth will be higher because of the financial consolidation of the former Mannesmann Rexroth business acquired in December 2000.
At Geneva, Bosch showed its commitment to investment in technology with a new concept in rollover sensing. The system detects dangerous rotation in the vehicle at an early stage.
A yaw - or body roll - sensor and two acceleration sensors are built into the central airbag control unit. The system allows early activation of seat-belt pretensioners, head protection airbags and safety bars, said a Bosch spokeswoman.
Market introduction is planned during 2001.
Bosch said two of its most important recent product innovations, ESP (electronic stability program) and common-rail systems, have passed the 3 million unit mark in total production.
Bosch introduced ESP as an option on the Mercedes-Benz S-class in 1995. It now offers the system on almost 50 models in 16 vehicle brands.
Increasingly, ESP is being offered as standard equipment on new models - for example, on the Audi A4.
Bosch said it produced almost 1.5 million ESP units last year.
Bosch introduced its common-rail system in 1997 on the Mercedes-Benz C-class and Alfa Romeo 156. It passed the 3-million-unit mark in late 2000. Production is now over 180,000 systems a month.
Bosch expects to introduce its second-generation common-rail system in 2002. The system features a new high-pressure pump and a high-performance control unit, allowing injection pressures up to 1,600 bar.