Bosch plans to double India exports by 2030 and beyond: Guruprasad Mudlapur

Guruprasad Mudlapur, president of the Bosch group in India and managing director (MD) of Bosch Ltd, talks about the company's strategy and challenges in India

This interview has been updated to correct an error in the previous version  With over 39,000 employees and 17 manufacturing centres in India, German major Bosch India is the big boy of the global auto components business. Guruprasad Mudlapur, president of the Bosch group in India and managing director (MD) of Bosch Ltd, talks to Surajeet Das Gupta in a video interview about the company’s strategy and challenges in India. Edited excerpts:

 

As a global company, where do you see India’s place in the auto sector?

 

I think we are quite good in terms of manufacturing competitiveness. In terms of technology, we still need to catch up on several of the new electric vehicle (EV) technologies like Advanced Driver Assistance Systems (ADAS), for which vehicle technology is not the only factor. It’s also the infrastructure that needs to come in. In terms of supply chain, we still have quite some distance to go, especially in EVs. There needs to be a lot more effort to build a supply chain for batteries, critical components, etc.

 

The government is implementing an anti-lock braking system (ABS) in all two-wheelers, including below 125 cc, to enhance safety. Companies say this move will only benefit global players like you who manufacture the system. What is your view?

 

It’s one viewpoint. The Indian auto industry has, for a long time, been 5–10 years behind, and it is only in the last few years that it has really caught up. In many cases, we are in line with or even better than global standards. Today, there are over 20 million two-wheelers sold per annum in India. It’s a very large volume, which gives India a manufacturing scale advantage that is unparalleled anywhere else in the world. And this will bring prices down quite significantly. So I don’t think we should focus on the price as it stands today. We may well become the ABS capital of the world.

 

Is India as competitive as China in auto components?

 

India is extremely competitive. Our current exports are about 9 to 10 per cent of our production, and our plan is to double that by 2030 and beyond. But I think where we need to improve is in our ability to procure, especially just in time. Also, our logistics costs, which affect the landed cost in different parts of the world, need to be at par with wherever the product is manufactured. That’s something we need to work on.

 

Is there a basic disadvantage India has compared to China in terms of production costs?

 

China has a very different scale for its domestic market itself. So its volumes are four to five times ours in most categories. Secondly, China has also been a little bit ahead of the curve on several new technologies, helped by consumer preferences and buying power there. But even with much lower volumes, for example in ABS and ESP systems, we in India are as competitive as China today for domestic supplies. There are several reasons for that, such as lower input costs, the ability to have differentiated manufacturing techniques, and lower capex, which eventually makes us equally competitive.

 

The government has been pushing two things — more localisation in manufacturing and a bigger thrust on exports. What has been your strategy?

 

We are quite well localised. For example, in BS4 and other technologies, we reached localisation levels of over 80-85 per cent. But in some of the newer technologies, we start with 30-35 per cent localisation and climb up over a period. Today, everything that we bring in starts with 50 per cent.

 

Why is manufacturing and localisation still a challenge in India for many components?

 

The fundamental reason is economies of scale. For example, the number of passenger EVs sold is of the order of just over 100,000. At that volume, it is not viable to localise every single component. So, in such cases, we may end up buying some subcomponents that are already produced in large volumes elsewhere and bring them in at the right price. That’s the trade-off we make, and that’s how we approach localisation.

 

Will the tariff battle in the US impact your exports from India?

 

I think tariffs are a challenge for the entire auto industry right now. Our view is that it’s still in an early phase. I know India and the US are working on a trade deal. That said, it may also open up other opportunities for us —not just in the US, but also in other markets—because there could be a shift in production networks due to tariffs.

 

Is the Chinese near-ban on rare earth magnets a cause for concern?

 

It has been a major topic in the auto world in recent months. We hope there will be a resolution and that supplies will resume, so we can move forward in the right direction. I don’t think there’s a quick fix to this issue.

 

Do you see hybrid technology having a future in India, or should the country move directly from internal combustion engine (ICE) to electric?

 

Hybrid is a very viable technology. It has a certain space and a valid use case that makes a compelling case under many circumstances, especially in city pollution control and in meeting emission norms for urban use. You need dual powertrains to operate in such conditions, or in areas where you want longer driving range, less dependence on infrastructure, but still have electric-like efficiency.

 

You have been working on hydrogen-powered vehicles for a while. What is the best route for hydrogen vehicles in India?

 

Globally, we’ve already been doing quite a lot since the early 2020s. In India, we believe the way hydrogen is likely to come in is through hydrogen injection technologies — hydrogen ICE — not through fuel cells initially. Right now, we see hydrogen being used primarily in heavy commercial vehicles and long-haul trucks, where even at today’s input cost, it starts to make commercial sense.

 

But why is India not going ahead with fuel cell technology?

 

One issue is hydrogen purity. The second is the robustness of fuel cells for Indian road conditions. And third, fuel cell technology is expensive compared to simple injection technology, as it accepts some level of impurity in hydrogen which fits India.