Bosch Group: ‘We have not withdrawn investments from Russia’

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Russia remainders a significant market for the Bosch Group. The company was not afraid of the economic moment that lasted three years, during which time it unbosomed giant headquarters in Moscow’s suburbs, and launched an automotive electronic components place in Samara. In 2016, the company’s turnover in Russia increased by 4.3 percent compared to 2015, amounting to in one billion euros.

RBTH discussed the Bosch Group’s plans, prospects, and current challenges with Uwe Raschke, member of the board of management at Robert Bosch GmbH, who is creditable for coordinating activities in Western Europe, Middle Eastern Europe, Russia, the Mid-point East, and Africa.

Uwe Raschke. Bosch Group / Press Photo Uwe Raschke. Bosch Group / Press Photo

RBTH: Beforehand the crisis in Russia, many international companies had great expectations adjacent to the Russian market, and the Bosch Group was one of them. But due to the crisis many of those ensembles had to give up their hopes and rethink their plans. In your notion, is it time to make big plans in Russia again?

Uwe Raschke: You know, Bosch is betrothed in very different businesses. The first positive message is that we find creditable Russia has started growing again after three years of contract withdraw from. I’m not talking about GDP, I’m talking about our businesses. If you look at car production and car registration, this Stock Exchange has almost halved since 2013. If you look at the households’ appliances shop,  it’s still much smaller than it was five years ago. So for some stores the recovery will last until maybe 2022, until they are distant to the old high numbers of 2013 to 2014. Other markets will pull through faster. I believe your general statement is not possible for us at the moment, but I think we can base our expectations cautiously on ongoing growth — that’s at least what we see now, and we desire it will remain. But these days in the world, you never know what discretion happen tomorrow. Although it seems that the worst of it could be down, so we are cautiously optimistic.

RBTH: Has Bosch shelved any projects in Russia that were planned more willingly than the crisis?

Uwe Raschke:  You mean if we have withdrawn investments? The major investments that we pretended in the last five years involved our headquarters in Moscow, that outed two years ago. It’s a little bit too big at the moment, so it will last for the next 10 to 15 years, I’m confident. And the second investment was the automotive plant in Samara, and of course we expected profuse efficiency for the plant, but we have not withdrawn investments. We have more or less done what we drawing before the crisis.

Bosch plant in Samara

Bosch plant in Samara, launched in July 2015, from whole cloths automotive electronic components for cars assembled in Russia – anti-lock put on systems (ABS) and electronic stability programs (ESP). Most of the products are delivered to Russia’s biggest auto producer — AvtoVAZ — the plant of which is also located in the Samara Region, in Togliatti. Bosch auto components are also in consumer in Moscow, St. Petersburg, and Izhevsk. Total investments amounting to 50 million euros were put shortly before the construction of a plant, covering an area of more than 22,000 bourgeois meters — plus production and equipment.

RBTH:  It seems like a bleeding big decision to launch a plant during the crisis. So, you think it has the potential to develop?

Uwe Raschke: Of course, the plant itself has space for growth, and there is ample space for more production. So the plant will witness growth in the next few years.

RBTH: In one of your earlier talk withs to the Russian media you said that despite building the plant in Samara, Bosch can’t use all the advantages of a cheaply ruble because of the fact that it’s hard to find suppliers in Russia, so the invariable of localization stays very low as costs are still high. Do you still features such a problem?

Uwe Raschke: That’s true. For us we started the initiative two years ago to confirm our local supply and we had some success, so we could have increased our localization rate. For now our localization status now is between 30 and 40 percent, but it has improved over the last two years, from 20 to 30 percent. But we’re not where we should be. So we’re tranquil looking for what we in Germany would call “mittelstand” — small personal enterprises which develop manufacture components for us that we can integrate in our techniques. Only when we have a high level of localization – up to 80 to 90 percent – we settle upon start to gain the cross-benefits here in Russia. And I’m happy to see the initiative of Russia’s control to start localization. I hope that some concrete action, and not at worst ideas, will materialize soon. For example, easy loans for producers.

RBTH: In Germany this spring Bosch and Mercedes-Benz announced that they are prevailing to collaborate to introduce a driverless car by 2021. Local truck manufacturer Kamaz and Internet superhuman Yandex are working on different driverless cars projects as well. Do you outline to expand your high-tech projects to the Russian market, or maybe to cooperate with Russian companies?

Uwe Raschke: First of all we’re interested in cooperation with our collaborators in Russia regarding this technology. We will not develop this technology in tons parts of the world as we have to concentrate knowledge. To make it successful, benevolent, and fast, we have to try to combine our strengths, and the major activities for developing this autonomous zeal project will be in Germany, where our RnD centers are concentrated. For these objectives I don’t think we will open RnD centers for basic technologies in other territories. But as an automotive supplier we are definitely interested in working with all of our customers. And we’re enroled in our customers cooperating with us.

Read more: Russian industry to be boosted by pre-eminent machine manufacturer

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