TOKYO -- Robert Bosch GmbH said on Tuesday it planned to invest more than 110 million euros ($133 million) in Japan this year, focusing mainly on the automotive technology sector.
Chief Executive Franz Fehrenbach told a news conference in Tokyo that Bosch aimed to achieve sales of 300 billion yen, or more than 2.2 billion euros at its automotive company in Japan in 2005, slightly up from 288.6 billion yen, or 2.1 billion euros the year before.
The privately held German industrial group, whose products range from ignition plugs to washing machines, said it would merge its Japan trading arm, Bosch KK, into Bosch Automotive Systems Corp. on July 1, renaming the company Bosch Corp.
Including non-automotive products, total sales in Japan would rise to 2.4 billion euros this year from 2.3 billion euros in 2004, board member Rudolf Colm said.
Regarding the group's overall automotive division, Colm said he expected worldwide turnover to grow "slightly above" the total growth of the automotive market, without elaborating.
Profit margins, however, would come under pressure due to the rise in prices of steel, resins and plastics, as well as the sluggish growth of the overall auto industry, he said.
Japan is Bosch's third-largest market outside Germany, accounting for more than half of its total sales in Asia. Bosch said it aimed to strengthen its ties with Japanese car manufacturers to benefit from their robust expansion abroad.
"Our aim is to secure an even greater share of the prosperity enjoyed by the Japanese automotive industry and also to contribute to this success with our innovative products," Fehrenbach said.
Bosch would aim to expand its business in passive and active safety features such as electronic stability control systems, while promoting diesel engines as an ecologically sound power system in Japan.
While Bosch's growth with healthy Japanese car companies overseas helped make up for the weakness at many Western car makers, Fehrenbach said the sales slump at General Motors and Ford Motor Co. was having a major impact.
"The business in North America with the Japanese (car manufacturers) is right now not large enough the offset the decrease in the business with GM and Ford," he said. "But we are working on it."
Fehrenbach said last month Bosch would try to maintain its group-wide pretax profit margin at last year's improved level of 6.4 percent in 2005 after conceding two weeks earlier that the original 7 percent target could not be reached due to high materials prices and sluggish demand.
The chief executive also said Bosch was aggressively pursuing growth opportunities in the fast-expanding Chinese and Indian auto markets, including by preparing development and production capacities for common-rail diesel systems in Bangalore, India.