Asia Pacific remains a growth region: Bosch invests 1.2 billion euros

Asia Pacific Conference of German Business 2016

  • Forecast for 2020: Asia Pacific to be world’s leading IoT market
  • Investments and government schemes offer wealth of opportunities for business with connected solutions
  • Localization policy also applies to connectivity: Bosch opts for local engineering and intensifies partnerships in the region
  • Bosch plans to have 120,000 associates in Asia Pacific by the end of 2016

Hong Kong – Asia Pacific is a region in transition: growth rates are reaching a sustainable level, in emerging markets such as China, India, and ASEAN member countries, the middle class is growing, and with it the demand for quality products and smart technologies – established markets such as Japan and South Korea have long been global innovation leaders in this segment. The Bosch Group can see a number of ways of actively helping to shape this change: “Especially when it comes to connectivity, we can see huge potential in Asia Pacific. Thanks to its broad footprint, Bosch is ideally positioned to offer cross-domain solutions from a single source,” said Peter Tyroller, the member of the Bosch board of management responsible for the region, ahead of the 14th German Industry Asia Pacific Conference (APK) in Hong Kong from November 3 to 5, 2016. In 2015, Bosch generated sales of 19.2 billion euros in the region, and thus roughly 27 percent of its global sales.

Asia Pacific therefore remains a significant driver of growth for the supplier of technology and services. This is also reflected in its activities in the region: “For the present year, we plan investments in our Asian locations totaling some 1.2 billion euros.” Bosch is pursuing a policy of localization in the region, having already invested some 2.5 billion euros – or roughly one-quarter of all Bosch Group investments in that period (10 billion euros) – in the previous three years. The company, which has had a presence in Asia Pacific for more than 100 years, now operates more than 60 locations in 18 countries in the region.

Market for the internet of things is growing rapidly

“The market for the internet of things (IoT) is also growing rapidly in Asia Pacific,” Peter Tyroller says. “We forecast that the region as a whole will have the world’s greatest IoT market potential by 2020, at 37 percent.” According to a study, the market for the Industrial IoT in Asia Pacific alone should grow fivefold between 2015 and 2020.It is expected that urbanization and industrialization will accelerate Asian countries’ development, and connected technologies can play a part in this. Government initiatives are also having a great impact on the connectivity business market. With its “Made in China 2025” initiative, the Chinese government is above all supporting the widespread use of connected solutions in industry. The “Make in India” program aims to modernize manufacturing in India. As a leading supplier of Industry 4.0, Bosch offers solutions in the areas of powertrain technology and automation as well as sensor technology and software. As a leading user, the company already successfully operates pilot projects in Asia as well, at manufacturing sites in China, India, South Korea, and Malaysia.

Apart from connected industry, Asian countries are above all investing in smart-city projects. Bosch offers mobility concepts as well as solutions that can connect power grids, lighting systems, traffic infrastructure, and buildings, helping to improve cities’ economic and energy efficiency. Pilot projects in this area are already running in India and Singapore.

Localization as the key to success – also in connectivity

Bosch believes that its proven “local for local” approach is also the key to success in its connectivity business. This is why the Bosch subsidiaries Bosch Software Innovations, Bosch Sensortec, and Bosch Connected Devices and Solutions have been present in the local market for several years. Indeed, Bosch Software Innovations was able to double its sales in the region in 2015. Alliances with local partners are also important: to enable use of the mySPIN smartphone integration solution in the Chinese market, for example, Bosch is collaborating with Tencent, one of the biggest Chinese internet companies.

One important element of Bosch’s successful localization strategy is the development of products and solutions that are tailored to each market’s requirements. Roughly 20,800 (or nearly one-third) of its research and development associates are based in Asia Pacific. In China and Singapore, they are working to create IoT solutions for the local market. And the more than 14,000 Bosch R&D associates in India make up the company’s largest R&D workforce outside Germany. These Indian engineers are developing data mining and software solutions. Since the end of 2015, Japan has been Bosch’s third development location worldwide for automated driving, and a source of valuable insights in this field.

The growing regional workforce – great demand for dual education

Bosch is an important employer in the region, employing more than 104,000 people. At present, therefore, roughly one-quarter of all Bosch associates work in Asia Pacific – more than twice as many as ten years ago. “We expect this workforce to grow to 120,000 by the end of 2016,” Tyroller says. At 55,000, China has the lion’s share of these associates, and the largest Bosch workforce outside Germany.

For more than 50 years, Bosch has been pursuing the proven dual education system in Asia. The competence center for vocational training in India has been in existence since 1961, and has regularly received national first prizes from various bodies. In China, Bosch opened the first of four occupational training centers in 2007. The dual education system was introduced in Thailand in 2013 and in Vietnam in 2014. All in all, more than 850 apprentices receive training each year at seven locations in the region.

Bosch at APK 2016: Peter Tyroller will speak at the panel discussion “Mobility and urbanization – cities of the future” on November 4, 2016 (14:15 - 15:30, HKCEC Hall C). The Bosch Group is a gold sponsor of APK 2016.

About Bosch

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.

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 upfront 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.

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