Bosch expands in N.A. with direct injection, ABS and more
Robert Bosch GmbH is bankrolling a major expansion in North America to keep pace with expanding vehicle production and to roll out new products. Direct injection for gasoline engines is going to be a big seller, and Bosch will launch production in the spring in Charleston, S.C. Mike Mansuetti, president of Bosch's North American operations, offered a progress report in an interview with special correspondent David Sedgwick.
Q: In August, Bosch said it spent 350 million euros in 2011 to expand production in North and South America. (Figures are not yet available for 2012.) What's your strategy?
We like to produce locally where we sell. We've been following that strategy, and it is driving a lot of this investment. For example, we've installed new lines in our Charleston facility to produce gasoline direct-injection systems. So we are ramping up.
Is this the first time Bosch produced gasoline direct-injection units in North America?
This is the first line, yes. We started in Germany, in our lead plant. We also invested in our plant in Turkey, for the European market. And now in Charleston.
How big is the North American market for gasoline direct injection?
Clearly the North American market here is heading to direct injection, while the Asian market is aimed more at port fuel injection. Charleston will become an exporter of port fuel injectors.
Is gasoline direct injection your big growth product in North America?
We have several. Antilock brake systems continue to grow, and we're glad to see that [demand for] start-stop systems is growing as automakers electrify their cars. [Other growth products are] transmission controls and electric power steering.
Are you finding customers for your diesel fuel rail systems? You've been pushing diesels in North America for a while.
It's a very interesting field. We got some new sales projections for the North American diesel market in 2018. We previously forecast that diesels would account for 8 percent of the light-vehicle market. Now we're moving up to 10 percent.
And what is diesel's market share now in the United States?
Are automakers introducing diesels in the United States to meet CAFE targets?
With CAFE, there are all kinds of ways to get there. Diesel is a good alternative. And you are seeing market acceptance. Look at Audi. Next year, you'll be able to buy diesel versions of almost all Audi models. Their diesel cars are flying off the lots.
Suppliers have been strengthening their supply chains in the wake of the earthquake in Japan. What has Bosch done?
We've taken a good look at it, and it has given us a new way of thinking about these crises. That's why we push for localization.
So localized production is partly a security issue?
Yes, exactly. We don't like to limit ourselves to one single supplier.
Have you taken a census of Bosch's second- and third-tier suppliers to detect any bottlenecks?
It's very difficult as you go down the supply chain. But yeah, we've done that, and our customers expect it. Customers like Toyota want to hear about our second-, third- and fourth-tier suppliers. Because that's where you can get into trouble -- with suppliers that you don't even think about. It's an ongoing process. You've got to keep working on it.
A couple of years ago, Bosch and other electronics suppliers were suffering from a global shortage of semiconductors. Have you fixed that?
On the automotive side, we have no supply shortages. We've taken care of it.
Did you line up new semiconductor suppliers?
It was a number of things. We branched out and found some new suppliers. And in some cases, we were able to revamp some of our products so that another factory could produce them.
So you dual-sourced key components?
We were able to find some new sources, to be a little bit more flexible.
North American vehicle production is expected to ramp up to 15.8 million units or so in 2013. Can Bosch meet its production quotas?
The continued recovery has made some supply chains a little tight. But we are meeting all our commitments and adding capacity. Things will remain tight in some areas, but we will be able to maintain our commitments.
What are you doing to boost production?
We're adding production capacity in Toluca, Mexico, for small motors, and we're ramping up production of direct injection in Charleston, and we can ship some components from Europe.
So you can produce components for your North American customers in Europe and Asia, too.
This was one of the lessons we learned from the tsunami. It's typically something you cannot do in the middle of a crisis. You can't go to your customer and say we'll produce this part at our other plant tomorrow.
So you plan to dual-source with your customer at the beginning of a contract?
It's very easy to do that on the front end. We go to them when we're [certifying] the first parts for start of production. So we can certify our direct injectors for production in Charleston, Germany and China. A lot of our customers have global platforms that we supply anyway. So we can help them out by shifting production around.
So it gives you more flexibility because you have some extra production capacity in another region.
Usually we don't have the same problem in every region of the world.
You can reach David Sedgwick at email@example.com.