Bosch is relying on gasoline direct injection and electronic stability programs to keep its lead over Visteon as the world's No. 2 auto supplier.
Bosch will only build 100,000 to 200,000 GDI units this year. But it expects the technology to eventually become as important to the group as high-pressure diesel injection is now.
Bosch's production of high-pressure diesel injection systems grew from 3.6 million units in 2000 to 5 million last year. The German group expects to produce almost 6 million units this year.
Injector sales helped boost Bosch's overall revenue marginally to an estimated $18 billion (19.5 billion) in a down market last year.
The growth pushed Bosch past a declining Visteon into second place among the world's auto suppliers in 2001.
The other current major growth area for Bosch is in electronic stability programs. Bosch produced 1.5 million ESP units in 2000, 2 million last year and expects to exceed 3 million this year.
A progression from antilock brakes and traction control, ESP works by taking information from sensors which monitor for signs of a potential swerve or skid. If a loss of traction is detected, the ESP system automatically applies the brakes or reduces engine power to stabilize the vehicle.
'That kind of innovation allowed us to secure our position as the world's No. 2 automotive supplier,' said Bosch CEO Hermann Scholl.
Scholl predicted that gasoline direct injection will grow rapidly in Europe, but said its prospects are uncertain elsewhere. Bosch expects its GDI production to rise to 1 million units by 2005 or 2006. By 2010, Bosch projects that GDI systems will be on half of all new gasoline-engine cars built in Europe.
A GDI engine works on the diesel principle of fuel being injected straight into the cylinder.
GDI engines are very economical, which will drive their popularity in Europe where fuel costs are high, said Bosch.
But Bernd Bohr, Bosch board member for gasoline and diesel systems, said he sees 'no chance' for GDI in the USA due to increasingly rigorous emissions standards.
Because GDI is a 'lean-burn' combustion system, its success in the USA depends on the development of a new generation of catalytic converters.
The situation is 'undecided' in Japan, Bohr added. He expects GDI growth there only in the second half of the decade.
Bohr was more optimistic about diesel growth in the USA. Bohr expects Bosch to gain a 'significant' market share for diesels in the USA by
2010, although he declined to be specific.
Bosch is supplying a common-rail diesel injection system for a Chevrolet pickup fitted with an Isuzu diesel in the USA, and sales appear to be going well. Bosch's development center in Detroit is adapting diesel engine management systems for the USA. It is adding assembly capacity for common-rail systems in Charleston, South Carolina.
Continued growth in demand in Europe for diesel-powered cars helped Bosch last year, Scholl said. The European market share of new passenger cars equipped with diesel engines grew from 33 percent in 2000 to 36 percent last year. Scholl expects it to rise to 40 percent this year.
* Bosch revised upward its forecast for the global automotive market in 2002.
'We had expected a further fall this year after a 4 percent drop last year,' said Wolfgang Chur, member of Bosch's management board and head of automotive operations. 'Now we have changed to minus 1 percent as a result of a better forecast for the USA.'
The immediate outlook in Europe remains weak, said Chur.
For 2003, Bosch expects 4 percent global growth in the automotive industry, led by recovery in Germany and the rest of Europe.
Bosch expects its own sales in Europe to be flat this year.