· Asia-Pacific region's share of sales to rise to 25 percent in the next ten years

· Activities with Chinese carmakers to be strengthened

Wuxi / Stuttgart – The Bosch Group intends to significantly expand its activities in China. This was announced by Franz Fehrenbach, the Chairman of the Board of Management, at a press conference on the occasion of the opening of a new development and manufacturing facility in Wuxi. "Bosch has a strong focus on China. We see it as a core country for our business in the entire Asia-Pacific region," Fehrenbach said. The Wuxi site covers some 300,000 square meters and is situated roughly 200 kilometers west of Shanghai. By 2007, Bosch will have invested roughly 200 million euros in the facility for the production and development of advanced diesel systems. Between 2005 and 2007, it is planned to invest a total of some 650 million euros in the People's Republic of China. Up to 2004, Bosch had invested roughly 550 million euros in the establishment and expansion of its Chinese activities. In the past five years alone, the number of Bosch manufacturing facilities there has doubled, from 10 to 20.

The goal is to continue to strengthen the company's ongoing activities in China: "This year, the sales of our Chinese companies are likely to exceed 1.2 billion euros. Year on year, on a comparable basis, this means a 20 percent increase," Fehrenbach said. By 2007, Bosch intends to have more than doubled the sales of its companies in China to 2.5 billion euros. This also applies to its purchasing volume, which currently stands at some 670 million euros. In the same period, it is also expected that the number of associates will rise from its current level of approximately 14,000 to almost 18,000. In this process, the company will be relying above all on local managers.

Expansion of Chinese operations fosters growth
in the Asia-Pacific region

The plans for China are a key component of Bosch's Asia-Pacific strategy. "In Asia-Pacific, we will generate sales of roughly six billion euros this year – exactly five times as much as ten years ago," Fehrenbach said. In the future, Bosch intends to further extend its presence in this growth region: "Asia-Pacific's share of our worldwide sales is currently 14 percent. Ten years from now, we expect this share to be 25 percent." For example, Bosch will invest some 100 million euros in the production of common-rail diesel systems in India by 2007. In South Korea, the company plans to spend roughly 100 million euros on new diesel technology products by 2010.

In automotive technology, Bosch is now present in China at three engineering centers – in Shanghai, Suzhou, and Wuxi – and has a comprehensive marketing and after-sales network, with eight sales branches and more than 430 car service workshops. "Like most industry experts, we expect to see China continuing to grow in the ranks of car-producing countries – probably occupying second place behind the U.S. just six years from now, which will put it ahead of Japan and Germany," Fehrenbach said. In particular, Bosch intends to share in the above-average growth of Chinese manufacturers, who will also be playing a greater role in international markets in the years to come. "We want to accompany China's development – with technology 'invented for life,' to quote our company slogan. Our innovation policy is geared to conserving resources and to protecting the environment, and thus matches the declared aims of the Chinese environmental protection agency." As early as the 1970's, Bosch set up its "3-S program," with the aim of making driving ever safer, cleaner, and more economical.

Diesel systems and ESP: for more environmental protection and safety

This is why Fehrenbach believes there is good potential for the introduction of state-of-the-art diesel systems in China. Above all, the low consumption and positive eco-balance of the "clean diesel" make it a promising product: "In Western Europe today, every second new car is a diesel. In China, this share is currently still very low. In the next ten years, however, it may increase to some 15 percent." By increasing this diesel share, China's dependence on imports of crude oil could be significantly reduced, he said, and carbon dioxide emissions could be lowered. At the same time, this would bring the country closer to achieving the targets set out in the Kyoto Protocol. Fehrenbach is confident that electronically controlled diesel injection will become increasingly dominant in the Chinese market: "This is an opportunity both for environmental protection and for our new facility in Wuxi."

Apart from state-of-the-art diesel systems, Bosch expects to see considerable growth above all in its ESP electronic stability program in China. As Fehrenbach pointed out: "In 2004, only two percent of all newly manufactured cars in China were fitted with ESP. By 2009, this figure may be as high as 10 percent." The reason for this is the increasing demand for safety. Currently, the number of road deaths in China is still more than twice as high as in Europe, despite significantly lower traffic density. With the diesel and systems such as ESP, Bosch was, he said, helping to bring about a significant improvement in environmental protection and accident prevention in China.

Bosch founded its first trading office in China as early as 1909. In 1926, the first car service workshop opened in Shanghai. Today, all of the Bosch business sectors are present in China. The company operates via a holding company in Shanghai, 13 subsidiaries, six joint ventures, and six trading companies.

The Bosch Group is a leading global supplier of technology and services. According to preliminary figures, some 270,000 associates generated sales of roughly 38 billion euros in the areas of automotive and industrial technology, consumer goods, and building technology in fiscal 2009. The Bosch Group comprises Robert Bosch GmbH and its more than 300 subsidiaries and regional companies in over 60 countries. If its sales and service partners are included, then Bosch is represented in roughly 150 countries. This worldwide development, manufacturing, and sales network is the foundation for further growth. Each year, Bosch spends more than 3.5 billion euros for research and development, and applies for over 3,000 patents worldwide. With all its products and services, Bosch enhances the quality of life by providing solutions which are both innovative and beneficial. The company was set up in Stuttgart in 1886 by Robert Bosch (1861-1942) as “Workshop for Precision Mechanics and Electrical Engineering.” The special ownership structure of Robert Bosch GmbH guarantees the entrepreneurial freedom of the Bosch Group, making it possible for the company to plan over the long term and to undertake significant up-front investments in the safeguarding of its future. Ninety-two percent of the share capital of Robert Bosch GmbH is held by Robert Bosch Stiftung GmbH, a charitable foundation. The majority of voting rights are held by Robert Bosch Industrietreuhand KG, an industrial trust. The entrepreneurial ownership functions are carried out by the trust. The remaining shares are held by the Bosch family and by Robert Bosch GmbH. Additional information can be accessed at www.bosch.com.

PI5148 - November 17, 2005