A FEW MONTHS AGO, NEWS broke that Bosch, one of India’s largest auto ancillary firms, was working on a diesel version of the Tata Nano that would give around 40 kilometres to a litre. While the diesel Nano had been announced, details about its fuel efficiency were closely guarded. At Bosch’s headquarters in Koramangala, Bangalore, there was disquiet about how aspects of such a top-secret project came to be widely discussed. Even today, Bosch executives are uncomfortable talking about the Nano diesel, except to admit that they are indeed working with Bombay House on the car. They refuse to discuss its mileage, and call the report ‘speculative’.
Bosch takes secrecy seriously. To enter its corporate office, it takes three rounds of physical checks. Photography is not allowed inside its factories. Teams working on projects for competing brands (say, Fiat and Suzuki) sign non-disclosure agreements which carry strong penalties. At least one person has been dismissed for breaching these clauses, say insiders, though the management denies having taken such action. The sense of secrecy is so pervasive that during lunch hour, teams instinctively tend to sit separately in the canteen to minimise the possibility of casual conversation leading to exchange of information. “Firewalls rule our lives,” says an executive.
But then Bosch isn’t just any auto component maker. With revenue of €51 billion (Rs 3.5 lakh crore) in 2011, it is the world’s largest, and nothing short of a hi-tech giant. Last year, it spent €3 billion on research and development globally—nearly the combined size of India’s top three home-grown component companies (Motherson Sumi, Sundaram-Clayton, and TVS Motor) and close to research spends by Apple and Samsung. It filed 4,100 patents in 2011 and, as insiders say, 16 patents a day is the accepted norm. Much of what Bosch does affects one of mankind’s most common activities—driving. (It’s also a significant player in the consumer durables and industrial technology sectors.)
In 1997, it pioneered the high-pressure common-rail fuel injection system, which is now a standard feature in most diesel cars around the globe. Universally seen as a killer app, many believe it has led to the ‘dieselisation’ of the world. Today, of every 100 cars sold in Europe, 50 are diesel. Diesel engines produce more torque, which means a smaller engine generates as much power as a larger petrol engine. This leads to better fuel efficiency and, ultimately, less emissions. In 2000, Bosch unveiled the D1 Motronic direct fuel injection system, a combination of an ignition and injection system, which is connected to an engine management system. This allows petrol engines to burn fuel more efficiently, leading to reduced emissions and improved fuel economy.
Bosch executives say four factors will dominate auto industry thinking in the immediate future—lower emissions, better fuel efficiency, safety, and comfort—and the company is focussed on researching those.
In an era of high fuel prices and climate change, such research places Bosch at the forefront of the movement to make the world a better, healthier, and safer place. I.V. Rao, managing executive officer-engineering, Maruti Suzuki, says that between 1999 (when Bharat Stage I emission norms were introduced) and today (Bharat Stage IV) Bosch’s diesel injection systems have reduced emissions by 85%. High-end cars such as the BMW 7 Series are fitted with exhaust gas recirculation systems with Bosch’s valves, which reuse exhaust fumes for combustion. As Rao puts it, Bosch’s work is as important as a pharma company trying to find a cure for Alzheimer’s. This fits Bosch’s self-image.
Till about the late 1990s, most of the R&D Bosch did was restricted to its headquarters in Stuttgart, Germany, and the Palo Alto Centre in California. But over the last decade or so, it has moved some of its research here and encouraged its Indian operations to do more. In 1998, it set up Robert Bosch Engineering and Business Solutions, an R&D facility (its second largest) at the sprawling 7 acre Bangalore factory campus. These moves coincided with the birth of locally designed automobiles, and Bosch was uniquely placed to play midwife to a series of projects that changed the face of the Indian auto industry.
It was Bosch that helped Ratan Tata create the Nano and Anand Mahindra build the XUV500 (and the Bolero, Scorpio, Maxximo, and Xylo). It also worked with Maruti Suzuki on the bestselling Swift and the A-Star, its European export. Bosch’s work in India in the past decade has changed the way most Indians drive, and, as is becoming increasingly evident, now influences worldwide auto technology trends. In the span of a few years, Bosch has metamorphosed from the ubiquitous maker of spark plugs (and other components) to a crackling hot tech outfit. Already the markets have begun discounting the stock of Bosch Ltd. (the only listed outfit of the six Bosch subsidiaries in India) more in line with technology companies (HCL, Tata Consultancy, etc.) than auto component companies.
IN FEBRUARY THIS YEAR, Bosch’s global board met in Bangalore, a first. V.K. Viswanathan, president of Bosch’s India business, explains that such departures (board meetings mostly take place in Germany) indicate a country’s growing importance within the Bosch universe. (China is the other country where the board has recently met.) All nine directors were in India for a week and, among other things, discussed how to boost Bosch’s contribution to global revenue from the current 3.5% to 5% by 2015. These expectations perhaps follow from Bosch’s market dominance: While it competes with companies such as Delphi, Visteon, and Denso, according to market estimates 85% of all diesel passenger cars, trucks, and off-highway vehicles such as tractors use Bosch beneath the hood. Bosch Ltd. has grown by 19% annualised in the last decade.
Reporting structures have also been rejigged: Senior employees here also report to Stuttgart. Such a dual arrangement exists only in four other markets—Brazil, China, Japan, and North America. This, along with incentives being aligned—pay is determined by personal (50%), divisional (20%), and global (30%) targets—has ensured that India has a bigger say in Bosch worldwide than its share of global sales would merit.
Most significant is the build-up of tech talent. The Bosch group employs close to 10,000 engineers here. Of these, nearly 2,500 work at the Robert Bosch centre. Inside its sterile offices sit row upon row of techies writing codes that are changing how we drive.
AT THE HEART OF ANY MODERN automobile lie scores of chips that determine everything—from safety and comfort to entertainment and fuel efficiency. Electronics constitute 20% of a car’s value today, up from 5% in the late 1970s. As Stephan Rausch, director, after sales, BMW Group India, says, cars have stayed the same for a century. “The electronics and materials have changed.” A high-end car today has more electronics than the first rocket to the moon. Even something as mundane as a windscreen wiper has a chip embedded. A high-end BMW 7 Series may have nearly 120 electronic units controlling the car, while a Nano has a couple. It’s this technology wrapping that gives India its edge: Bosch’s ability to stay ahead is no longer determined by workers in greasy overalls making a multitude of parts, but by Indian engineers writing code that’ll run those parts.
As Vijay Ratnaparkhe, managing director, Robert Bosch Engineering and Solutions, says, India’s mandate is to find simpler ways of doing the same things, or doing more with less, without compromising quality, precision, or safety.
So, as he asks somewhat rhetorically, do you need 10 temperature sensors in a car? “As long as you know the ambient temperature and the oil temperature and you have the necessary computing power, you can compute the same in a microcontroller and bring down costs considerably. That’s the kind of innovation going on in system development,” he says. Ratnaparkhe’s team has been able to whittle down the number of sensors and electronic control units (ECUs) and cut costs of the fuel-injection system by 30%.
Other examples: using a microcontroller to route sensor data from the bonnet to the airbags, which are inflated when it seems that an accident is unavoidable. Or, a micro-controller that uses data from the wheels and reduces engine power if there are signs of the car skidding. Such technology, hitherto available only in expensive cars, is slowly seeping into vehicles such as Maruti’s Ertiga because of the work done by techies here.
Bosch also makes electronic stability programmes (ESP) combined with anti-lock braking systems (ABS) for two-wheelers. It’s currently available only in the Honda CB250 and one variant of the TVS Apache. These systems are expensive, and bike manufacturers are unwilling to raise prices in a cut-throat industry. Viswanathan says Bosch is working towards reducing costs—and will evangelise how these technologies can reduce fatalities.
It’s easy to see how the techies are creating opportunities for their business. Between 12 million and 14 million two-wheelers are sold in India; if even 5% of them start throwing in ESP and ABS, that’s a huge market.
Ratnaparkhe says doing this kind of work means challenging and questioning existing assumptions. Equally, it’s about configuring the chips in such a way that fewer are needed to assimilate the same amount of information. That calls for some nifty code writing and using microcontrollers with more computing power.
“That’s the thing about Bosch,” says an automotive executive at Ashok Leyland. “In the component business, it will invest tier I money for a tier III product. It does so in niche areas and then develops the market.”
Last year, Robert Bosch Engineering accounted for 66 of the 87 patents that Bosch filed from India. The remainder were from Bosch’s other companies, including Bosch Rexroth, which makes electric drives and controls, and Bosch Chassis System. “It is a substantial jump if you consider we filed for only four patents in 2006. We are likely to cross 100 this year,” says R.K. Shenoy, senior vice president, engineering unit—power train electronics, a part of the Robert Bosch centre. Ratnaparkhe argues that they need to file many more, “given that we have as large a team as Germany”.
Most of the patents filed were know-how that simplified complex technologies and made them affordable. Bosch Rexroth has filed for a patent on a high-pressure pump (model A-4000) that can work even with adulterated fuel. Bosch feels this will change the game in emerging markets.
But what gives Shenoy and Ratnaparkhe a high is that India is considered Germany’s equal in certain areas, such as software for power train—basically software used in engine transmission, drive shafts, differentials, etc. to generate the power to drive a car. Last year, India was designated the global centre for power train electronics. Today, almost half of the worldwide engineering work for power train is done here.
They work on what is called the transnational location model, where India takes complete global responsibility for certain work—such as implementing and interpreting the communication between various ECUs—and partial responsibility for certain others. Shenoy elaborates: “Basically, we provide the complete power train solution—both hardware and software—for emerging economies and only do some work, such as providing the software for the safety systems in cars, for the developed markets of Germany, Japan, and the U.S.”
One of the path-breaking innovations created here ties in with Bosch’s global goals of furthering clean technology. Called Denoxtronic, it’s an exhaust gas treatment technology that substantially reduces the nitrous oxide in exhaust fumes. This is already used in cars in Europe, though it has yet to debut here. Says Shenoy: “We have taken the lead in certain technologies and will drive them globally. They will also influence the course of our innovation and our patent strategy.”
THE SHIFT FROM BEING JUST another multinational outpost to a significant player began in the late ’90s. In one of its earliest projects, Bosch teamed up with Maruti Suzuki to make the fuel injection systems for the WagonR, Omni, and the 800. It changed Bosch’s image, and soon the company was making multipoint fuel injection systems for several other cars. But if ever there was a tipping point for Bosch, it came in 2003. That was the year, recalls Viswanathan, that Bosch’s India brass met Ratan Tata and Ravi Kant of Tata Motors at Bombay House, where Tata told the Bosch team that he wanted them completely involved in “the project”. He was referring to the Nano.
Viswanathan, Bosch’s first Indian, and non-engineer, head, had joined the company in 1998 after spending the first part of his career at Hindustan Lever (now Hindustan Unilever). In his late forties then, he had risen to become Hindustan Lever’s financial controller and worked on all its famous buyouts (Tata Oil Mills, Kwality, etc.) when a headhunter made the Bosch pitch. “What attracted me to Bosch was that it was a totally new industry,” he says. Viswanathan joined as chief general manager and was sent off to Stuttgart where he learnt how automobile engines worked. Till then, he thought making soaps was the pinnacle of technology. He also learnt how to drive in Stuttgart. He returned in 2001 as joint MD and within two years, Bosch India was sucked into its most famous project yet.
Bosch had a historical relationship with the Tatas; since the 1950s, it had supplied components for Tata trucks. But when Tata Motors designed the Indica, its first passenger car, it chose Delphi. Changing suppliers depending on the cars is something most car manufacturers do, and Bosch wanted to make a comeback to Tata Motors. It pitched hard for the Nano—and was selected. Timothy A. Leverton, head, advanced and product engineering at Tata Motors, an old auto hand with experience at Land Rover, BMW, etc. explains: “We decided to go with Bosch because it had an established track record in India, had strong engineering, technical, and electronic skills, and could draw on its global expertise and networks for developing innovative products.’’ Basically, Bosch could do everything from design to manufacturing.
Back then, Bosch had begun reworking its India strategy. The turn of the millennium had hit the auto industry hard, and, partly in response to that and partly to ready itself for the coming auto boom, Bosch started restructuring furiously. It announced a voluntary separation scheme to reduce headcount, readied to launch common rail engines, bettered its financial management, upped productivity, added dealers, and so on.
Indeed, one of the reasons why the Nano project was so important was that Bosch didn’t want competition (Delphi, Visteon, or Denso) to get a leg up in frugal engineering innovation, which could later be parleyed around the world. “We told the Tata Motors officials, including Ratan Tata, Ravi Kant, and others in our regular meetings starting from 2003, that we would do everything to support the Nano because we realised that never in Bosch’s history had such a project been thought of, leave alone conceptualised, applied, tested, and finally commercialised. It was a big high for us,” says Viswanathan.
Ratan Tata had famously declared that he wanted a sub-Rs 1 lakh car. Re-engineering could help cut costs by 10%; Tata wanted a 60% to 70% reduction. The big challenge for Bosch was to cut costs without compromising quality.
“We asked them to design an all-new engine management system which not only had to meet the Nano’s price point but, more important, had to be fuel efficient and meet emissions norms,” says Leverton. Bosch had to develop completely new systems with limited help from its parent.
“There were doubting Thomases everywhere,” says Viswanathan. But he found an ally in Bernd Bohr, chairman of the Automotive Group of Robert Bosch. Viswanathan talks of a meeting where Tata told Bohr why he needed Bosch to be on board fully to make the “impossible possible”. After that, Bohr was a staunch supporter of Tata’s project.
Bosch formed a 34-member team under Sandeep N., regional president, gasoline business. “It was the first time we had worked so closely with a customer,” he says. To cut costs, the team stripped down an existing Motronic ECU used in European small cars. They called it Value Motronic. The techies say they “depopulated functionality” of the ECU without compromising either performance or safety.
Where the full-function ECU controlled some 5,000 engine functions, the stripped-down version controlled 1,500. This, in turn, meant that fewer sensors were needed, leading to a significant cost reduction. At the same time, Bosch ensured that the ECU could support extra features when needed. It’s the car equivalent of the plug-and-play feature in computers. If Tata wants, it can add features such as a start-stop system simply by adding software to the existing ECU. This was inspired thinking.
Bosch then revolutionised engine technology by using one injector for two cylinders (itself a first for a car) in the engine instead of the usual two, and making the distributor pumps more compact.
It was an exercise in frugal engineering that the Germans had never witnessed before. And it established India’s technology capabilities. “Bosch exceeded our expectations,” says Leverton.
Many of the things that Bosch learnt on the Nano came in handy while designing Mahindra & Mahindra’s Maxximo Mini Van. The single-injector, two-cylinder technology that it had developed for the Nano was fitted on the Maxximo. “We were opening up a whole new market,’’ says Baskaran R., vice president, engineering and applications, diesel systems, Bosch. “It was not low-priced technology for a cheap, people’s car, but really state-of-the art, cutting-edge stuff that no one had thought possible.’’
But Bosch’s innovation went far beyond the two cylinder engines (lower cost and higher fuel efficiency), to new compact direct starters, new baseline alternators, and start-stop systems. Take the case of M&M’s micro-hybrid variants of the Scorpio and Bolero. The technology used here puts the engine into standby mode when it is idle for a few seconds, say at a traffic signal. The engine fires up as soon as the clutch pedal is pressed. “This technology can save 8% to 9% on fuel,” says Viswanathan.
Then, there are the new baseline alternators. These are more compact, use less metal and are, therefore, lighter, but in terms of specifications and performance, they are better than the earlier ones and consume less fuel. “Not only are they used in most Indian cars, they are also being exported,” says Viswanathan.
Bosch is also the only automotive parts supplier to manufacture ABS in India for passenger cars and light commercial vehicles; it makes braking at high speeds safer as it prevents the wheels from locking and the vehicle from skidding. It already has its first client: the Mahindra Bolero Micro Hybrid. Then, again thanks to Bosch, the Maxximo can alternate between fuel variants such as LPG and LNG.
Because of all this, the earlier trend of products being developed in the West and then tweaked for the emerging world will change. “Car companies looking for two-cylinder engines for their small cars will turn to us,’’ says Baskaran. As more and more global automobile giants line up their entry-level cars for their domestic and export markets to survive these difficulties, every frugally engineered product coming from Bosch’s India stables will find plentiful takers.
THE FUTURE, SAY THE white-coated folks at Bosch, will belong to the “Internet of things’’ or Web 3.0, where machine-to-machine communication will create a more intelligent car. Simply put, the electronics in the car will be able to talk to one another and personalise a lot of things for the driver, including the speed of the car, temperature, etc. If the memory chip in the airconditioning knows that the driver likes to drive at 22°C, it will automatically adjust to that temperature. Similarly, it is possible to play music stored in smartphones or MP3 players or even browse the Internet through the Bosch-developed navigation system.
Bosch’s techies are already working on some of this. But the core issue they will need to grapple with sooner than later strikes at the heart of auto technology that’s more than 100 years old: What will power a car? Bosch’s 125-year-old business has developed around the internal combustion engine. But, with all the talk of hybrids, etc., does Bosch risk a Kodak moment? (The iconic company lost out because it didn’t shift to digital technology early enough.)
Viswanathan says the internal combustion engine is here to stay, at least for the foreseeable future, “because it’s still the cheapest and most efficient technology available. Of course, the technology itself will keep getting refined further.” However, he adds that Bosch in Germany has begun working on lithium ion batteries and electrical engines. Though India is not working on this yet, it’s not difficult to imagine techies here being roped in at an appropriate juncture.
Till recently, middle-level Bosch managers were encouraged to buy the Maruti Suzuki Swift, since it used Bosch’s fuel injection. But such directives no longer hold, because, as a manager says, “There’s a bit of Bosch in every car.”
