Bosch, has the game changed?

As a long-established Tier 1 giant, Bosch 's performance remains stable.

Recently, Automotive News released the 2024 Global Top 100 Auto Parts Suppliers List. Bosch still holds the top spot, and its sales to global automakers will rank first in 2023.

As the wave of electrification and intelligence swept across the country and the competition in the auto market became increasingly fierce, Bosch was not without anxiety, but under the transformation, it still maintained its basic foundation and achieved further growth in business. More importantly, in this process, Bosch constantly changed its gameplay and gradually laid out a new chess game for the future. This chess game is about the Chinese market, business focus, and software , the core business...

“The Chinese auto market is very important”

Bosch has never concealed its importance to the Chinese market, especially the Chinese automobile market . A strong proof of this is that in the past 10 years, Bosch Group has invested more than 50 billion yuan in China, an average of 5 billion yuan per year.

At the 2024 Bosch Technology Day event held recently, Bosch once again expressed its "sincerity" to the Chinese automobile market.

"Both in terms of market size and technological development, the Chinese market is indeed very important," said Dr. Stefan Hartung, Chairman of the Board of Management of Bosch Group, in an interview with Gasgoo and other media.

He said that he saw two major trends in the Chinese market: First, in terms of smart connectivity, Chinese users have a great demand for advanced driver assistance functions, and they are willing to pay for them; second, electrification is developing very rapidly and leading in China.

According to Dr. Mathias Pillin, Chief Technology Officer (CTO) of Bosch Smart Mobility Group, Bosch is in a leading position in the market in both advanced intelligent driving and electric drive.

As for advanced intelligent driving, based on Bosch's global software platform and in cooperation with local Chinese partners, Bosch has increased the speed of development and can quickly achieve mass production and delivery. It is reported that it took Bosch only 18 months from project selection to mass production.

In terms of electric drives or electric axles, Bosch has achieved a high degree of standardization and industrialization in the Chinese market, enabling it to mass-produce these standardized solutions, apply them to vehicles, and quickly increase scale.

"China is the fastest-growing technological market in the world and to some extent is setting the pace, and we need to follow this trend," said Mathias Pillin.

At present, Bosch has established sufficiently strong local R&D capabilities in China to support the development of its business in China.

Stefan Hartung pointed out, "China is an innovation base and is very advanced in the field of emerging technologies. Due to market demand, we have established software development capabilities in China. Now, we can share the innovations we develop in China with other markets around the world. This is a revolution."

Taking hydrogen energy technology as an example, it is understood that Bosch has developed hydrogen fuel cells in Europe , and at the same time, there is also a team in China independently developing this technology.

Stefan Hartung mentioned that compared with other markets, China has the largest number of commercial vehicles equipped with hydrogen fuel cells in use. "In China, we have cooperated with partners such as Qingling to put hydrogen fuel cell commercial vehicles into the market, and the scale is unmatched in other markets."

Of course, he also stressed that in the Chinese market, Bosch must always maintain maximum competitiveness and develop rapidly. "We are not comparing ourselves with Germany or the United States, but with our competitors in China. This is what we pursue."

"Bosch will support Chinese manufacturers to enter the European market"

Being in the Chinese auto market, it is hard not to pay attention to the trend of Chinese auto companies going overseas. In recent years, the momentum of Chinese auto companies going overseas has been growing stronger, but challenges have also continued to emerge.

On June 12, the EU disclosed the level of temporary tariffs to be imposed on Chinese electric vehicles . Among them, BYD , Geely and SAIC, which have cooperated with the sampling survey, will be subject to tariffs of 17.4%, 20% and 38.1% respectively; Chinese electric vehicle manufacturers that cooperate with the EU investigation but have not yet been sampled will be subject to a weighted average tax of 21%; and other Chinese electric vehicle manufacturers that have not cooperated with the investigation will be subject to a tariff of 38.1%.

It is reported that the European Commission has contacted the Chinese authorities to discuss the preliminary anti-subsidy investigation results and decisions, and to explore possible ways to resolve the problems found in a manner consistent with WTO requirements. If the discussions with the Chinese authorities fail to reach an effective solution, the above tariffs will be formally imposed on July 4 in the form of guarantees on the basis of the existing 10% tariff of the EU (the specific form will be determined by the customs of each member state). At the same time, the EU's anti-subsidy investigation on Chinese electric vehicles will continue until November 2, when the final tariffs, which usually last for 5 years, may be imposed.

In Stefan Hartung's view, this is not a good solution because it will ultimately be passed on to end users, making them pay higher prices, which will have an adverse impact on consumers and business development.

He said that the above tariff measures have not yet been implemented and he hopes that they can be properly resolved. "I hope that everyone will not fall into a situation where tariffs are raised, because that is of no benefit."

Putting aside the impact of the switch tax, he also mentioned that the European market has always been very competitive. There are many differences in the European market. For example, Germany and France are very different. The markets of different countries have different language and cultural backgrounds and different consumer preferences. This is the complexity of Europe. But different markets also have common principles. For example, user orientation is also important in Europe. "So the question is, what kind of car does the user need."

In his opinion, the Chinese market is technologically diverse and complete. Chinese manufacturers should think more about how to target customer groups and how to set prices, so as to decide which vehicles and technologies to choose to enter the European market and ultimately succeed in which market segments.

Of course, he also emphasized that Bosch will fully support the development of Chinese manufacturers, just as it once supported European manufacturers to enter the Chinese market, and will also support Chinese manufacturers to enter the European market. "We provide them with technology and products, and based on our understanding of the local market, we help Chinese manufacturers adjust functions to meet local user needs or assist with market access certification. We will provide support whenever they need it. The cooperation between us is very good, not only in the Chinese market, but also can be seamlessly connected to overseas markets."

“Bosch will not participate in all areas of the automotive industry chain”

It should be pointed out that Bosch does not intend to "take on everything" either in the Chinese market or in overseas markets.

"We have our own clear strategy and will not participate in all areas of the entire automotive industry chain. After all, this will require a lot of money and resources." Stefan Hartung pointed out that business focus is very important for Bosch.

Dr. Markus Hein, member of the Bosch Group Board of Management and Chairman of Bosch Smart Mobility Group, said that electrification, automation, vehicle computers , software services, hydrogen energy and semiconductors are all areas where Bosch focuses on and has achieved a leading position in the market.

He added, "Business development is not a single linear process, but rather a multi-point investment and convergence that drives the rapid growth of the business. We hope to continue investing in these key focus areas and maintain innovation to lead future market development."

Of course, it cannot be ignored that in the new automobile era, the boundaries between OEMs and suppliers are gradually being broken, and the trend of "self-research" by automobile companies has emerged, and it seems difficult for suppliers not to be affected.

In this regard, Markus Hein said that the discussion about vehicle manufacturers independently developing vehicle software architecture has been going on for a long time. However, according to his observation, although some vehicle manufacturers want to develop the entire stack themselves, they ultimately choose to do it together with partners.

As he said before, nowadays, more and more vehicle manufacturers have realized that full-stack self-development and maintenance at the software level requires a lot of effort and cost, so they hope that suppliers like Bosch can provide them with some solutions. On this basis, they can do some of their own things, otherwise they have to rely on their own research and development and maintenance, which is very laborious.

According to him, Bosch has basically cooperated with all vehicle manufacturers. " In the era of software-defined cars , there is a lot of software programming work. From the perspective of vehicle manufacturers, some of the software is not very differentiated. In this area, we often become the preferred partner of customers. In addition, we can usually play an important role and make contributions to critical software systems involving safety. In short, every vehicle manufacturer has cooperation with us, but the focus is different."