Aftermarket and workshops: on the cusp of a new era

Connectivity will define the workshop of the future

Dr. Uwe Thomas, President of Bosch Automotive Aftermarket


Dr. Hans-Peter Meyen, Executive Vice President Product Area Diagnostics and Engineering, Bosch Automotive Aftermarket

at the press conference, September 13, 2016

AA’s development

Ladies and gentlemen,

Welcome to our booth at this year’s Automechanika. Together with my colleague Hans-Peter Meyen, I would first like to give you an overview of the developments at Bosch Automotive Aftermarket.

Allow me to start with a few details about our business development and provide you with some figures. Bosch Automotive Aftermarket has grown at around the same pace as the market, with about eight percent growth last year. Among other things, currency effects drove growth in the market and at Bosch. As a result, we were able to further strengthen our market leadership. For the current year, we plan to grow about three to four percent, which will be comparable to market growth.

Bosch Automotive Aftermarket also expanded its product portfolio. Without doubt, the biggest development was the complete integration of ZF Lenksysteme into our company. While the former joint venture’s original equipment business has become Bosch Automotive Steering, we now also supply parts retailers. Moreover, our division is also responsible for the remanufacturing of old steering systems. By consistently changing wear parts, and by carrying out comprehensive quality controls and functional tests in reconditioning processes, we ensure the high quality of our products. The workshop and its customers can rest assured that the components and steering systems are just as safe and functional as the original equipment.

This not only applies to Bosch steering systems; it will soon also be true for those of other manufacturers. We are thus contributing to making road traffic safer: thanks to our remanufacturing products, older vehicles can also be equipped with an affordable, high-quality reconditioned steering system.

Let’s now have a look at how business developed in Europe, our core market, last year. In 2015, we achieved sales growth of around five percent in Europe. Moving forward, we expect competition to intensify, as growth in the European market is likely to be moderate this year.

Latin America continues to be the automotive industry’s biggest problem child. Following the drop in raw material prices, major markets such as Brazil collapsed. In spite of this development, Automotive Aftermarket performed well. In the North American market, we have not recorded any major changes. Here, our development remains stable, and North America is still our second biggest region in terms of sales.

The Asian markets have continued to show a positive development. Especially in India, we grew seven percent last year. In fact, our growth there was even greater than in China. And this was not an exception. We expect the trend to continue in 2016. Overall, we are also satisfied with our development in China. While the pace slowed somewhat in 2015, China remains a very important market for us. In the coming years, we expect to see significant growth in the country.

Developments in the African market were a positive surprise. We were able to grow our business by 11 percent in the region, and we see good growth potential for the years to come.

Especially in the emerging countries, we want to step up our Bosch Car Service operations. To this end, we have already begun to develop our own flagship workshops. In China, three such workshops are already in operation, and the first is set to open in India in October. Moreover, we are currently examining other markets. These workshops offer us an opportunity to gain our own experience at selected locations. In turn, this allows us to develop even more attractive country-specific services, which we can then offer to our partners. Today, the network that was founded in 1921 counts more than 17,000 service operations. This makes it one of the the biggest chain of independent workshops worldwide.

Developments in the industry

Ladies and gentlemen,

As you can see, Bosch Automotive Aftermarket has a strong set-up. But this isn’t a reason to rest on our laurels, quite the contrary:

In our view, our entire industry is facing bigger challenges than it has in a long time. On the one hand, market developments in some regions – like Europe, as I have already mentioned – mean that competition has intensified. However, increasing digitization and connectivity will shape the biggest change for all market players in the aftermarket segment. While this trend will bring forth major opportunities, it also represents change so significant that it could pose an existential threat for some actors in the market.

We have seen such developments in other industries before. Service, high levels of transparency, attractive services, and customized customer support are also becoming increasingly important for workshops and in parts distribution. In fact, they are becoming essential. Allow me to take the argument one step further: service and even closer contact to end customers are crucial for the future success of our business.

This new reality is based on the growing connectivity of the vehicle and its surroundings. Today, telematics data can be accessed very easily. The workshop can then use these data to assess the vehicle’s status and prepare the work required, long before the car rolls into the workshop. This benefits everyone involved, and helps make planning reliable. Fleet operators can plan appointments effectively, workshop employees can be scheduled accordingly, and efficient logistics for parts wholesalers can be ensured.

Two years ago, we predicted the growing significance of digitization for both vehicle and workshops, and we presented our initial approaches to paving the way for it. At the time, we were pioneers in the field and our ideas were met with astonishment. But we kept to our plan and our retail and workshop partners also recognized the importance of the topic. At Bosch Automotive Aftermarket, the connected workshop is now our central focus. In our view, the high number of connected services and augmented reality applications has made the connected vehicle one of the central topics of Automechanika 2016. Here at the Bosch booth, we are presenting a broad range of related products and services.

Connected vehicles make it possible to combine different services with one another. So why not think one step further? For instance, why not combine maintenance work while a car is parked in a parking garage? Doing so will require high-performance online platforms that will make it possible to link existing and new business models to one another. Bosch offers workshops such a platform with the Bosch IoT cloud, which is designed to take the needs of workshops and wholesalers into account. We know these requirements very well because we are active in this field of business ourselves, and we have deep knowledge of the entire value-added chain. This is why we can offer customized solutions that we have developed specifically for this sector rather than merely adapting other technologies.

As these examples show, the entire market is in a state of upheaval. At the same time, it is a highly appealing market that is attracting many new players. This means that we must prepare for new competitors. Just as has happened in other markets, players from different fields of business, such as IT companies, have recognized that the combination of software and services is paving the way toward new business models. And they are acting fast. There is thus a pressing need to respond to new conditions. Those who fail to do so risk falling behind very quickly.

At Bosch, we are well prepared. We are holding the key that opens the door to new business models. One example of this is the new Connected Repair software, which connects all systems within a workshop. In just a few seconds, all of a vehicle’s data and its entire history can be called up. This not only simplifies processes, it also makes them more efficient and saves our customers´ time and money.

Competition in the parts business continues to increase, and will grow ever more intense as a result of innovations and new technologies. However, the competition should be fair. This means, for instance, that all market participants must have access to vehicle data. Vehicle owners must be able to decide what happens with their data and who is permitted to use it. This is why we ask customers what we can and should do for them with their data before we access it.

With increasing connectivity, data protection is also gaining significance. Thanks to our encryption technologies and high industry standards, we can ensure that our customers’ data are safe from hacker attacks and data theft.

Digitization is also changing everyday life in many fields of business. When we talked about augmented reality two years ago, it still seemed like a distant dream to many. But have you noticed how many people are now chasing Pokémons? For young people, augmented reality is already an established part of the everyday life. To them, the real and virtual worlds are naturally connected to one another. And it is this very connection that opens the door to new work methods for a modern workshop.

Augmented Reality can also save lives. In cooperation with Daimler AG, we have developed an app that helps fire fighters cut open vehicles. It is based on our Common Augmented Reality Platform, CAP for short, which can be used to generate applications for different vehicle models. CAP has thus made it possible to use augmented reality on an industrial scale for the first time ever.

As you can see, connectivity and digitization are gaining significance in our field of business. This is why we are offering an ever-greater range of services and developing beneficial new offers that serve our customers’ interest. This will allow us to secure the future success of our business.

I would now like to hand over to Hans-Peter Meyen, who will provide you more detailed information about our new products.

Ladies and gentlemen,

I would also like to welcome you to our booth.

As Mr. Thomas already mentioned, connectivity is having a growing impact on our business. At Bosch, we have contributed our expertise from other divisions and used it to come up with customized solutions for the aftermarket and workshops. Our aim is to optimize the work processes of workshops. What’s more, we want to improve the flow of IT-related data at workshops. In short: we aim to achieve more efficiency and greater transparency for workshops and their operators.

Let me give you a few examples to illustrate what I am talking about. Drawing on our experience as a cloud provider, we were able to develop the new “SWEETWORXX” platform, which is currently being piloted in California. It makes it possible for drivers to connect to the workshop quickly. Via this app, users can book a variety of services. Service is the key word here, for instance in the form of a pick-up and delivery service. Customers go to work in the morning and park their vehicles there. By the time their working day is over, their car is in the same place, but has already been at the workshop. Without doubt, such a service leads to greater customer satisfaction and loyalty.

With “Drivelog Connect”, we offer additional services via the smartphone. This app gives drivers real-time information about the vehicle’s status. To this end, the Drivelog Connector is connected to the diagnostics interface, which transmits important data to the smart phone via a Bluetooth connection. The Drivelog then analyses error codes, routes travelled, or driving style, for instance. In particular, the analysis of driving style provides valuable information. It allows drivers to find out how much fuel their vehicles consume and thus helps them save money. In the event of a breakdown, the vehicle’s position can be determined and transmitted to the roadside assistance service, along with the error code. As a result, drivers can receive targeted assistance more quickly.

Mr. Thomas has already mentioned our Connected Repair workshop software. Connected Repair connects all Bosch diagnostics systems in the workshop. This means that all computers have immediate access to all vehicle data. Registering the vehicle in the database is all that is required. Once this has been done, workshop employees only need to enter the license plate or vehicle identification number to access a vehicle’s entire history. They can do this from any workstation, and important data are immediately available across the workshop. With this technology, we have simplified the planning process for visits to the workshop. At the same time, we have contributed to making work processes faster and more efficient.

As already mentioned, telematics data from vehicles offer workshops the possibility to cooperate closely with fleet operators.

Both parties benefit from the Bosch solution. Via our IT infrastructure, fleet operators receive a good overview of a vehicle’s status, driving style, and necessary repairs.

Smaller fleet operators, such as delivery services or service providers in the trades, can easily hand over fleet management to workshops. In so doing, workshops can coordinate required maintenance work at an early stage and thus reduce a vehicle’s down time. This is the basis of close cooperation between fleet operators and workshops.

For secure data transmission, we are currently expanding our offer by applying state of the art encryption technologies that were specially developed by ESCRYPT, a Bosch subsidiary.

The insurance industry has also expressed interest in our telematics solution, which can be used in any vehicle. In fact, a major German insurance company is set to start using our telematics offer in the very near future. The aim is to offer younger drivers more affordable insurance policies in exchange for access to their telematics data. By making these data available, young drivers can prove that they have adopted a defensive driving style. This shows that our telematics solution also promotes an economical and safe driving style.

As you know, vehicle technology is increasingly complex. This is also reflected in the workshop. We have responded to this technical challenge with augmented reality. The employee points a smartphone camera or tablet at the vehicle. Instead of seeing a Pokémon appear on the screen, they see important additional information on a real image of the car. This can include explanations such as operating instructions or circuit diagrams, three-dimensional objects, pictures, or videos. This information helps provide a deeper understanding of the product in question and makes it easier to detect malfunctions.

We also continue to develop our traditional workshop services. With Esitronic Web, we have developed an online diagnostics portal that complements our Esitronic 2.0 workshop software. This software now delivers repair and maintenance-related information even faster. Since Esitronic Web does not need to be installed on any specific device, all workshops can use it. All that is needed to retrieve the desired information is an internet connection and a browser. Here, too, workshops save time and money.

With its broad range of products, Bosch has always stood for innovation and quality. The M Li-ion, our new high-performance battery for two wheelers, is the most recent example. Thanks to lithium-ion technology, its cycle stability is significantly improved. At the same time, it is more dynamic and lightweight than traditional lead-acid batteries. Here at Automechanika, the battery has just received the Innovation Award for innovative and trailblazing products.

Ladies and gentlemen,

As you can see, we not only offer our customers prize-winning innovative replacement parts, but also a broad range of connected services. These include Drivelog Connect, Connected Repair, Augmented Reality applications, telematics services, and Esitronic Web. These services are our answer to the changes in our field of business. As Mr. Thomas already said: we will continue decisively on this path. In so doing, we will keep offering our customers the newest and best solutions, and this will allow them to master the challenges ahead.

Thank you for your attention.

The Automotive Aftermarket division (AA) provides the aftermarket and repair shops worldwide with modern diagnostic and repair shop equipment and a wide range of spare parts – from new and exchange parts to repair solutions – for passenger cars and commercial vehicles. Its product portfolio includes products made as Bosch original equipment, as well as aftermarket products and services developed and manufactured in-house. About 17,000 associates in more than 150 countries, as well as a global logistics network, ensure that spare parts reach customers quickly and on time. AA supplies testing and repair-shop technology, diagnostic software, service training, and information services. In addition, the division is responsible for the “Bosch Service” repair-shop franchise, one of the world’s largest independent chains of repair-shops, with some 15,000 workshops, and more than 1,000 “AutoCrew” partners.

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The Bosch Group is a leading global supplier of technology and services. It employs roughly 410,000 associates worldwide (as of December 31, 2018). The company generated sales of 78.5 billion euros in 2018. Its operations are divided into four business sectors: Mobility Solutions, Industrial Technology, Consumer Goods, and Energy and Building Technology. As a leading IoT company, Bosch offers innovative solutions for smart homes, smart cities, connected mobility, and connected manufacturing. It uses its expertise in sensor technology, software, and services, as well as its own IoT cloud, to offer its customers connected, cross-domain solutions from a single source. The Bosch Group’s strategic objective is to deliver innovations for a connected life. Bosch improves quality of life worldwide with products and services that are innovative and spark enthusiasm. In short, Bosch creates technology that is “Invented for life.” The Bosch Group comprises Robert Bosch GmbH and its roughly 460 subsidiary and regional companies in over 60 countries. Including sales and service partners, Bosch’s global manufacturing, engineering, and sales network covers nearly every country in the world. The basis for the company’s future growth is its innovative strength. At nearly 130 locations across the globe, Bosch employs some 68,700 associates in research and development.

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