News: Shift to India saves Bosch 30% in costs

(BL 23/03/2007) Bangalore - Bosch's move to shift production of certain parts to India has started yielding results, with the company being able to save costs up to 30 per cent. In a related development, Bosch officials told Business Line that Eastern Europe and South America have emerged strong contenders as low-cost locations for shifting work from high-cost regions such as Western Europe. "India and China are not the only options available for the company," said Ferdinand Allerkamp, Joint Managing Director. He said that India was part of the international network of production bases and hence, there was a possibility that more work could come to India. Lakshminarayan, Joint Managing Director, said that production of some of the parts out of India has now started yielding results. "There has been a cost savings of 20-30 per cent." He also said that Bosch expects the return on investments into common rail injection system production by 2010-11. Bosch has invested close to Rs 600 crore in the production of common rail diesel injection systems. In mid-2006, the first common rail pump rolled out of the Bangalore plant, while the Nashik facility started the manufacture of common rail injector components in December 2005. Some of the products whose manufacturing has been shifted to India are single cylinder pumps from the Czech Republic, multi-pumps from Austria and KCA injectors from France to Mico's Bangalore plant. Production of injectors and nozzles has been relocated to Nashik from Europe, while production of regulators has been shifted to the Nagnathapura plant from the UK. Production of cylinder VE distributor pumps has been shifted from Germany to the Jaipur plant. As per the forecast made earlier, Mico's exports was expected to grow at 30 per cent CAGR till 2006, while the export contribution to total sales is expected to improve to almost 20 per cent by the end of 2006. As per the results declared last week, Mico's CAGR growth rate in exports during the last five years was 26 per cent, while sales grew 21 per cent.