Bernd Bohr, chairman of Bosch Automotive, has made a big investment in powertrain technologies for electric cars, and he is prepared to be patient about the payback.
The German electronics giant has developed electric motors, lithium-ion batteries plus an array of other EV technologies. Bohr says he's willing to wait as much as 10 years for a return on his investment.
Here's an edited transcript of his interview with Production Line's David Sedgwick.
How good does 2011 look for Bosch?
We see the heavy-duty truck market picking up again on a worldwide scale. It's going to be a good contributor in 2011. The other growth driver is gasoline direct injection.
That means our sales per car will go up. We have a better market share in gasoline direct injection than port-fuel injection. So we are pretty optimistic.
How much of a sales increase will gasoline direct injection generate for Bosch?
At the end of last year, we made 1 million injectors per month. In 2011, we'll make 2 million injectors per month.
In the long run, what other technologies will generate growth?
If we look down the road, vehicle electrification is coming step by step. Here, we are well placed with our lithium-ion battery joint venture with Samsung. That's developing very nicely.
We also have a full offering [of technologies] for electric power trains: electric motors, DC/DC converters. In all these areas, we are very much at home.
A thriving little business - but it isn't clear to me whether there is much demand for EVs in the near future.
Our view is that the auto industry is going to be more and more electric. We decided that we needed to be on the bandwagon early. It has always been a strategy of Bosch to develop technologies early.
Electric cars are not going to be a big market for some time. In 2020, we project global sales of 3 million electric cars and 6 million hybrids. It's still not a huge market. For us, it's basically an investment in the future. We are learning every day.
When do you expect a return on your EV investment? Five years? 10 years?
For new technology, it's probably closer to 10 years than five years. Now, I'm not talking about adding another production line for injectors. I'm talking about new technology. Ten years wouldn't scare us.
What other products are generating sales growth?
Start-stop systems are really picking up in Europe. You need a reinforced starter, and you also need a battery management system. You need some sensors, plus an engine management system. So you need quite a bit of engineering, which is always good for Bosch.
Stop-start systems makes a nice package with gasoline direct injection, because it allows you to restart the engine more quickly.
Where will the auto industry go next?
We still see growth in diesels in emerging markets like India. And we still have our sights set on the U.S. market. We aren't going to give up there.
In the U.S., we are projecting that 10 percent of light vehicle sales will be diesels in 2015, up from 4.6 percent in 2010.
How does Bosch's R&D budget look this year?
This year we'll spend about 3 billion euros, which will be around 10 percent of sales. We kept r&d spending very stable through the crisis. We didn't have any large cutbacks.