Robert Bosch: Company to enter power tool, security technology segments

Currently targeting automotive market, sees more benefits from CPEC in future

LAHORE: The China-Pakistan Economic Corridor (CPEC) is the reason why so many global companies are seeing Pakistan as a possible investment avenue for their subsidiaries.

The recent entrant Bosch - a global supplier of technology and services - is currently eyeing the automotive market of Pakistan as a priority and also hopes to get more benefits from the CPEC in future.



“CPEC is a big project and we see it as a great opportunity for the country,” said Bosch Turkey and Middle East President Steven Young while talking to a group of journalists.

“The project will give a boost to the construction and logistics segments and will drive the potential business for us,” he added.

Bosch is expanding its operations in Pakistan via its subsidiary Robert Bosch Middle East, which sells automotive parts and equipment, power tools, thermo-technology, security systems and electric drive and control technologies.

According to Young, though Bosch products are being sold primarily in the automotive segment in Pakistan, they have decided to expand their footprint in power tools and security technologies.

The Middle East region subsidiary, having a turnover of €3.1 billion, is entering with only three business managers, who will be supporting partners in three categories. However, according to Robert Bosch Middle East Vice President and General Manager Volker Bischoff, it did not mean that the company was not likely to play a more prominent role in future.



“We always enter new markets with this approach. We will be watching developments in the market closely and see how the economy develops. We never rule out production plans for Pakistan but before that we need to look at the demand and know the market better,” Bischoff said.

According to IHS Global that provides analysis to support the decision-making process, the construction value in Pakistan would be approximately $8 billion in 2016, which is approximately 5% more than the previous year. The outlook is positive for 2016 with average growth of 3.5% for the next three years.

Similarly, data from the Ceemea Business Group, a global business consultant, showed that in October 2015, vehicle sales in Pakistan rose 56% year-on-year, with new vehicle sales rising for 15 months in a row.

It estimated that the middle class would expand 6% per annum over the next few years and put the middle-class consumer market at $290 billion.



Despite the strong indications in the automotive sector and the company’s claim of supplying products to 60 car-manufacturing brands worldwide, the local vendors may be engaged in stiff competition with Bosch, as they are supplying automotive products to the car manufacturers at much cheaper rates.



“There is no car in the world without Bosch products, we are much stronger when it comes to European markets, however, we are increasing our content with Asian car manufacturers, ie Japanese,” Bischoff said.

“Competing with local vendors is always a challenge but there is a growing awareness of quality products in Pakistan. Regardless of where we have made our parts, we have never been the cheapest. We are offering quality products which cater to the top middle and upper lower segment to satisfy the end consumer,” he added.

“Although the product has its name in Pakistan, we need more investment in brand awareness and brand creation; that is clear,” Bischoff added.

Published in The Express Tribune, February 20^th,  2016.

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