For Bosch, policy predictability crucial to investment climate

MUMBAI: Predictability of policies is an important factor for investment climate, the top executive of Bosch India said.
“We have to first accept that when you go to something new like electrification (of vehicles), you cannot leapfrog; you have to transition. Predictability of policies in many countries, especially India, is a very important factor for investment climate and consumer needs,” Soumitra Bhattacharya, managing director of Bosch Ltd, said in an interview.

“The automotive industry is giving one of the highest employments across GDP, and not only direct — you can take an X multiplier of indirect (employment),” he said indicating the importance of the sector in a country’s economy.

According to him, the government is making several policy initiatives to put India in step with the developed world, striving to make it a more environment-friendly and safer world.

Most of the policy initiatives have a direct bearing to the automobile industry. Transitions happen smoothly when there are “well-laid” and “well-defined” policies, Bhattacharya said. He was not referring to any of the policy decision taken by the Indian government.

There have been murmurs about the flip-flops that involve setting a deadline and then rescinding the date for making electric vehicles in the car segment compulsory, and then deciding to do away with the deadline, but Bhattacharya said the government has reacted positively to demands. “The government is keen to listen. I have been part of the Prime Minister's meeting with private sector CEOs (last month), where the Prime Minister spoke a lot about wanting to know from captains of industry about policies that have been set in place. We spoke a lot about reforms being done and he wanted to know the view and opinion of captains of industry including how the industry would partner the government,” he added.

On Bosch’s Indian subsidiary, Bhattacharya said his company is trying to “future proof ” its business based on long-term industry trends and not manage it on a quarter-to-quarter basis.

But that doesn’t mean Bosch has missed street expectations.

“We had 21% growth on the top line and 40% growth on the bottom line — the bottom line we were excess of the street (expectations),” he said.

About 10% of the Bosch worldwide turnover is spent on R&D. Bosch has modelled itself as a strong agnostic technology provider, which explains the many tie-ups it has with Indian companies in bringing frugal engineering and low-cost products for the local market.“We call it India first and we are closely working with the Government of India on doing what is right for India,” he said. “There is a lot of focus on innovation for affordable solutions.”

For companies like Bosch, investments in new technology is a must as carmakers look for alternatives to internal combustion (IC) engines. “Technology absorption cannot happen digitally,” he said. Bosch has been working for the last 10 years on electrification and has spent $1 billion-plus on electrification.

“It's not new to us but we believe strongly that IC technology is there to stay. (However) hybridisation will be a part of the roadmap.

Pure EV will come in phases and we feel in India, pure EV has a better chance on two-wheeler and three-wheeler than on the fleet, in intracity,” he said. He also avers that there are other factors that will decide the fate of technology.