2016-05-12 | China | Corporate News
Sales of Bosch in China reach a record high with 77 billion CNY
Bosch is the only company active on all three levels of the IoT in China: sensors, software and services
Four Bosch focus areas supporting “Internet plus” initiative in China: connected mobility, connected industry, smart home and smart city
Continuous investment of Bosch in China
Shanghai – Bosch has announced to drive forward its strategy in the area of connectivity and the Internet of Things (IoT) in the Chinese market. The leading global supplier of technology and services achieved a steady growth in China in 2015 with a consolidated sales revenue of CNY 77 billion. This records a new high of revenue, despite a less dynamic market environment. Compared to three years ago sales in the country have almost doubled, and China’s share in Bosch’s global sales have climbed from 9 to 16 percent – making it the Bosch Group’s largest market outside Germany. With more than 55,000 associates, China also employs the Bosch Group’s largest workforce outside Germany.
Bosch achieved a compound annual growth rate of over 22 percent in the country over the last ten years. For the current year, the company expects business in China to develop positively at a sustainable pace. “We continue to see many opportunities in the local market also in the ‘new normal’ of the Chinese economy – especially for our business with connected products and solutions“, said Peter Tyroller, member of the board of management of Robert Bosch GmbH responsible for Asia Pacific, at the Bosch annual press conference in China. “The IoT developed rapidly in China last year and is gaining momentum. One of the drivers behind this is the Chinese government’s ‘internet plus’ initiative, which is functioning as an incubator for connected businesses in China,” he added. Bosch is the only company that is active on all three levels of the IoT: sensors, software and services. With this unique advantage, the company will continue to be innovative on the basis of traditional businesses, exploring and seizing the diverse opportunities in the IoT market in China.
In view of the development of Bosch’s business sectors in China, Mobility Solutions continued positive growth in line with the development of the Chinese automotive market in 2015. Meanwhile, the Consumer Goods business recorded a healthy growth. With the acquisition of the 50 percent stake of BSH Hausgeräte GmbH previously held by Siemens, Bosch further strengthened its leading position in the Chinese home appliance market. The Industrial Technology, as well as Energy and Building Technology business sectors were impacted by the slowdown of domestic infrastructure investment.
New business development with global and local connectivity competences
Bosch is well positioned to shape the transformation into a connected world – worldwide and also in China. “We set up a strong local team for the connectivity area: our subsidiaries Bosch Software Innovations, Bosch Sensortec, as well as Bosch Connected Devices and Solutions are well established in China. Additionally, our corporate research has set up an IoT research and development team in China, bringing the latest innovations into the Chinese market as well as to global customers”, said Peter Tyroller. This underlines that Bosch is focusing on its localization strategy also when it comes to connected solutions.
In the area of sensors, Bosch expanded its global business from automotive to consumer electronics ten years ago. The company entered the Chinese market in the early stages of the business to provide Chinese consumers with high-performance micro-electro mechanical systems (MEMS) sensors. Today, three out of every four smartphones worldwide feature a Bosch MEMS sensor, and more and more Chinese leading consumer electronics brands are cooperating with Bosch.
Bosch Software Innovations is constantly expanding in China too – offering many innovative software and system solutions. The local team has also developed and applied the “Manufacturing Agile Response System” (MARS) which is used at the Bosch plant in Suzhou, where the company is running one of its 100 worldwide pilot projects in the field of Industry 4.0. The system improves productivity by as much as 20 to 40 percent and reduce inventory by 15 to 45 percent at the same time. It will soon be launched into the market to serve Chinese manufacturers for industry upgrades and transformation.
The business division Bosch Connected Devices and Solutions entered the China market last year. Since then, it has already brought connectivity applications to the Chinese market such as Retrofit eCall, an automatic emergency call system for automotive aftermarket, and XDK, a cross domain sensor platform for customers to develop their own IoT solutions more easily and quickly.
Localized connectivity strategies support China’s “Internet plus” initiative
“Focusing on areas such as industrial upgrades, environmental protection, electrified mobility, and on driving forward connectivity with the ‘Internet plus’ initiative, the 13th Five Year Plan of the Chinese government presents many new opportunities for Bosch. We are committed to the Chinese and to contribute to these developments”, said Chen Yudong, president of Bosch in China.
Bosch will also continue to invest in China. “In the past five years, we invested around CNY 18 billion in China. In 2015 alone, the total investment amounted to CNY 5.2 billion. “In 2016, we plan to invest on a similar level”, added Chen Yudong. Supporting the “Internet plus” initiative in China, Bosch will actively develop new businesses in the following four areas: connected mobility, connected industry, smart home and smart city. Bosch aims to drive connectivity forward and promote industry upgrades in China. In doing so, the company benefits from its broad product portfolio and in-depth industry expertise based on decades of experience. “We can connect mobility with energy, building, and industrial technology to offer cross-domain services – something few other companies can”, explained Chen Yudong.
Connectivity is changing Bosch’s business – and consequently the company’s personnel requirements: Currently, one third of the 56,000 research and development associates worldwide are dedicated to software. The need for talents with manufacturing domain knowledge and software expertise is also increasing. In 2015, 30 percent of the 5,500 research and development associates in China were dedicate to software development. In the future, Bosch will continue to increase the input in software talents to further strengthen software competency and prepare for a fully connected world. This year, Bosch plans to recruit about 2,500 talents in China, among which over 500 are IoT/ software-related.
Bosch Group worldwide business outlook for 2016
Following a record year in 2015 in terms of worldwide business, the Bosch Group wants to continue its growth trend this year. The company expects worldwide sales to grow within an exchange rate-adjusted range of 3 to 5 percent in 2016. Speaking at the company’s annual press conference in Germany in April, Bosch CEO Volkmar Denner said: “We plan to grow not only with innovative products, but also with innovative services.” The newly created Bosch Global Service Solutions division, the recently established Bosch IoT Cloud, as well as the Bosch Smart Home System launched at the start of 2016 contribute to this strategy.
In China, the Bosch Group manufactures and markets automotive original equipment and aftermarket products, industrial drives and control technology, packaging technology, power tools, security and communication systems, thermotechnology, household appliances. Having established a regional presence in China since 1909, Bosch employs close to 53,000 associates (as per April 1, 2015) and operated 62 legal entities and facilities, with consolidated sales of CNY 52.1 billion in fiscal 2014.
The Bosch Group is a leading global supplier of technology and services. It employs roughly 375,000 associates worldwide (as of December 31, 2015). According to preliminary figures, the company generated sales of more than 70 billion euros in 2015. Its operations are divided into four business sectors: Mobility Solutions, Industrial Technology, Consumer Goods, and Energy and Building Technology. The Bosch Group comprises Robert Bosch GmbH and its roughly 440 subsidiaries and regional companies in some 60 countries. If its sales and service partners are included, then Bosch is represented in roughly 150 countries. The basis for the company’s future growth is its innovative strength. Bosch employs 55,800 associates in research and development at roughly 115 locations across the globe. The Bosch Group’s strategic objective is to deliver innovations for a connected life. Bosch improves quality of life worldwide with products and services that are innovative and spark enthusiasm. In short, Bosch creates technology that is “Invented for life.”
The company was set up in Stuttgart in 1886 by Robert Bosch (1861-1942) as “Workshop for Precision Mechanics and Electrical Engineering.” The special ownership structure of Robert Bosch GmbH guarantees the entrepreneurial freedom of the Bosch Group, making it possible for the company to plan over the long term and to undertake significant up-front investments in the safeguarding of its future. Ninety-two percent of the share capital of Robert Bosch GmbH is held by Robert Bosch Stiftung GmbH, a charitable foundation. The majority of voting rights are held by Robert Bosch Industrietreuhand KG, an industrial trust. The entrepreneurial ownership functions are carried out by the trust. The remaining shares are held by the Bosch family and by Robert Bosch GmbH.