Parallel to sales developments of Bosch worldwide, the company’s local subsidiary is experiencing robust growth in the current year with its Automotive Aftermarket and Power Tools divisions generating 80 percent and 36 percent first quarter growth, respectively, compared to the same period last year. This, after the aggregate Bosch business in the country took a 25 percent dip in 2009.

“The Philippine situation gives Bosch a reason to be cautiously optimistic in 2010,” according to Mr. Cem Peksaglam, President and Managing Director of Robert Bosch SEA Pte Ltd who represents the Bosch Group in South East Asia, citing GDP projections of 4.1 percent for 2010 and 4.5 percent for 2011. “We remain confident in our long-term strategy as we continue to pursue opportunities for future growth in our business portfolios.”

With local car sales growing some 6.4 percent in 2009, Bosch aftermarket vehicle components experienced increased demand, mainly for electrical parts, fuel injection components, anti-lock braking systems (ABS) and diagnostic equipment. This year’s first trimester growth in car sales stands at 37 percent with April registering the highest growth rate at 43 percent.

“The Philippine car parts market is cost-driven but the awareness of quality being cheaper in the long-run is growing,” explains Joseph Hong, Managing Director and concurrent head of Robert Bosch Inc. Philippines’ Automotive Aftermarket division. The company recently increased its parts coverage of the growing vehicle car park, which is pegged at over 6 million registered vehicles.

The auto services industry has also grown significantly in terms of scope and capability. To date, the company has a growing number of accredited Bosch Car Service outlets as far up north as Ilocos Norte and south in Zamboanga.

Riding the wave

While Philippine shipbuilding and furniture exports reel from a lackluster performance in 2009, Bosch Power Tools rode the continued surge in the local mining industry for gold and copper, particularly in the Mindanao region. The Bosch rotary hammer is the tool-of-choice for Philippine mining and exploration due to its function, application and reliability. Power tool accessories also experienced brisk sales due to large-scale mining operations. Bosch is currently the largest supplier of electric power tools and accessories in local mining.

The domestic market for construction and development as well as home improvement and repair also experienced steady growth in 2009, averaging over 1.3 million square meters of building area constructed per month. Towards this, Bosch supplies the industry with precision tools that help developers deliver projects on time, according to specification and within budget.

Bosch portfolios managed by appointed local agencies likewise foresee opportunities in the local market. German Hydraulic and Plant Services Inc., one of the representatives of its Drive and Control Technology division (Bosch Rexroth) is engaged in various restoration and rehabilitation projects for the country’s power facilities, among them CBK Power in Kalayaan, Laguna and FirstGen Hydropower Corporation’s power plant in Pantabangan, Nueva Ecija.

Subsequently, German Hydraulic was also invited by FirstGen and Energy Development Corporation (EDC) to participate in the rehabilitation of the newly-acquired Bac Man facility in Albay. Other projects include AP Renewables (Aboitiz Group) in Makban, Laguna Geothermal Power Plant and Ambuklao Rehabilitation – an Aboitiz Group Project done by Andritz Hydro AG Switzerland and where German Hydraulic is tasked with the hydraulic engineering.

Bosch Packaging Technology, one of the leading suppliers for complete packaging and process technology systems, managed the upkeep of its local customers in 2009. The division is active in the local food, confectionery and pharmaceutical industries. Despite the economic crisis, the emerging markets in Asia and the Philippines could continue their growth in the past years and from which Bosch Packaging could profit from due to its strong footprint in Asia.

With the government aiming to boost the local economy, Bosch Security Systems sees further growth in the construction industry as well as infrastructure modernization projects. The business unit’s certified partner, CSI-Tech Corporation, had a very encouraging year in 2009, successfully installing Public Address and CCTV systems for some of the foremost government buildings and prestigious commercial establishments like five star hotels, embassies and public rail systems.

Weathering the crisis

“Bosch will continue to invest in future-oriented technologies that harness renewable sources of energy, clean and efficient mobility as well as initiatives that help build the community,” according to Mr. Peksaglam.

Bosch selected Metro Manila for the establishment of the Robert Bosch Communication Center, which went live in January 2010 and today provides technical support services in English, Mandarin, Korean and Japanese to Bosch offices in Asia Pacific. It targets to hire up to 200 associates this year. The center’s clientele comprises of internal and external customers.

Bosch also continued its technical cooperation with the country’s Technical Education and Skills Development Authority (TESDA), which produced over 5,500 graduates under the Hari ng Talyer (King of the Workshop) certificate training program. In December 2009, the company renewed its partnership with TESDA through a new agreement that stands to benefit over 107,000 Filipino workers employed in construction establishments. A Health and Safety campaign spearheaded by Bosch will complement the program.

Finally, Bosch sustains its commitment to promote education in the country via its partnership with Springboard and A Better Chance Foundation. Its first batch of graduates under the Class of 2010 program has already concluded its commencement exercise while another 76 scholars begin their culmination year in June. Bosch also fostered a partnership between TESDA and Don Bosco Boys Home in Cebu for a batch of 20 beneficiaries to be provided with livelihood training in automotive technology.

Bosch worldwide

The Bosch Group made a good start to the current business year, registering roughly 25 percent growth in the first quarter. The company intends to make up for much of the loss of sales in 2009 and return to a positive result in 2010. The significant boost comes from the Asia Pacific markets, which contributed a historic 20 percent of the group’s revenue in the previous year, exceeding that of North and South America combined. The Asia Pacific region is expected to represent 30 percent of global Bosch sales by 2015. All in all, sales in the current year are expected to grow by more then 10 percent to 42 billion euros and the pre-crisis volume of business, i.e. the 2007 level, could be achieved as early as 2011.

Last year’s global economic crisis affected the business development of the Bosch Group as sales fell by 15 percent to 38.2 billion euros. At minus 1.2 billion euros, profit before taxes (EBT) was negative for the first time in decades. Research and development spend is at 3.6 billion euros or close to 10 percent of its 2009 sales while the number of dedicated R&D associates rose to 33,000.