See muted FY16 for autos; eye double digit growth: Bosch

A: We have not seen any major change in the automotive market. The growth for March 2015 is muted. The overall growth up to March compared to the previous year, is zero. Segmental growth is different. In case of the passenger cars, we have seen 3-4 percent growth. Diesel compared to the gasoline has marginally moved down at 42 percent remains the same because the fuel differential between gasoline and diesel partly determines the sentiment.

Ekta: What is FY16 looking like both for the industry as well as Bosch and what growth can we expect?A: The figures of FY14-15 are not announced yet. So, I cannot announce that number. If you ask what does FY15-16 look like, I’d say that it looks like a muted year for the automotive industry. Segmental analysis says that there is going to be a negative growth on tractors; marginal growth on passenger cars and maybe a positive double digit growth on the heavy commercial vehicles (HCV), but on a very low base. Overall, a much muted growth is seen in FY15-16 currently in automotive, no major change.Anuj: Have all the labour problems at the Jaipur plant with respect to the lockout been resolved?A: I would stay with the statement given on the lockout. The company had taken steps to ensure the interests of the employees and stakeholders for the reasons mentioned. We lifted the lockout and announced to the stock exchange to ensure industrial peace especially when some people were going through a hunger strike. However, the settlement discussions are on and will need to be concluded.Ekta: Has there been any hit to production or impact on sales due to the lockout?A: There has been absolutely no impact on productions and even during the seven days, the lines were running. There has been no impact to customers and other stakeholders in any form and manner. Anuj: Can you elaborate on what is happening in the non-auto business?A: I cannot talk about any numbers now but if you generally ask me, the non-auto businesses that Bosch has are very varied in nature and different market forces play out for these non-automotive areas. We have solar, thermo technique, security systems. Each of these segments are very different. It is following the same trend as we see in the economy. There is tight liquidity in the economy today, so all companies including us watch carefully for inventories and receivables. The economy hasn’t majorly picked up. So, there are different segments, different rates of growth, but the overall economy is relatively muted on the ground.

Ekta: Your consumer appliances segment has been growing well. What is the expectation of growth going ahead within that segment?A: The consumer markets are different kettle of fish. Bosch has a very strong presence worldwide. We had started on lower base, so growth there would always be positive. However, it’s early days because we are relatively new player in India. In other parts of the world, Bosch is extremely major and mature player and has good market share. Anuj: Can you elaborate on how your company will benefit from the implementation of BS-IV emission norm changes from FY18 since the cost per truck is likely to rise. Will that help your revenues?A: The emission norm changes are being discussed in terms of when they will be announced for BS-IV and BS-V. They still have a two years period to go. Once the emission norms are implemented, the new regulations will enforce that the current generation products can both be conventional or new generation products and we would have to meet those norms. Also, when those norms have to be met products from companies like ours are basically looked at for whether there is enough research and development (R&D) and whether we are working closely with the customers to be able to give affordable solutions needed for India with quality as a given. We are prepared because of our global network as well as huge R&D base in India. We have been providing solutions to our customers and we believe that we have provided affordable solutions with Bosch reliability and quality worldwide. So, I would say we are ready for that.

Ekta: Do you think 15-20 percent revenue growth is doable for the company given positives like commercial vehicle cycle turning and new emission norms?A: We don’t give guidance and this is a very specific question on whether we can do 15-20 percent growth in next year. With any company, including Bosch, the growth is dependent not just on the company per se. It’s dependent partly on the company which is an aspect of market share but greatly on the ground reality of the economy. If the economy picks up and if we talk about next two or three years of going to a sustained 7 percent or even 8 percent, which is fantastic for India, and if the automotive does a come back, then would see even a double-digit growth, whether that’s 10 or 12 percent I cannot say, considering that we are a strong player in the market. This double-digit growth for any company including us requires primarily for the economy to pick up and we are hopeful that it will happen. We very carefully look at our market share, acquisitions and most importantly, we look at strong long-lasting partnership with our customers with whom we have had relationships over decade.