Bosch Sees India as Competitive as China in Auto Components

The government is implementing an anti-lock braking system (ABS) in all two-wheelers, including below 125 cc, to enhance safety.

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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 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.