Robert Bosch Chairman & CEO Peter Marks: Energizing Bosch

Chances are good that there’s a Robert Bosch GmbH product under the hood of whatever car you drive. Founded in Stuttgart, Germany, in1886, today the $63 billion com pany supplies automakers worldwide with a host of components, including gasoline systems; chassis systems controls and brakes; electrical drives; starter motors and generators; and steering systems. Beyond automotive technology, Bosch also manufactures household goods such as power tools, refrigerators and dishwashers, along with industrial robots and commercial packaging machines.

Annual U.S. sales have grown steadily and now account for a healthy portion$9.5 billion in 2007 of the business, with a hefty $6.2 billion of that coming from the company’s automotive technology sector. But economic uncertainty in the U.S. coupled with an auto industry hit hard by rising gas prices suggest that Bosch will need to work hard to continue its upward trajectory.

And that’s exactly what Peter Marks, CEO of Robert Bosch LLC, the company’s North American arm, aims to do. “This year, for the first time in our history, we’ll have negative growth in our automotive business, he says. We anticipate car sales in North America for 2008 may reach 14 million cars, which is about 1 million less than in 2007″.

Marks is banking on leveraging Bosch’s strength in innovation to offset that dismal news. And for good reason: Bosch plows an impressive 7.7 percent of sales back into R&D and dubs any day when it produces less than 14 patents a bad one.

The company, Marks points out, has long built its success around innovations in technology many geared toward fuel and energy efficiency. For example, Bosch developed a direct-injection diesel engine that uses less fuel and emits less CO2 than comparable gas engines and is now poised to launch a next generation engine that will further improve diesel fuel efficiency.

Today, increasing economic pressure for fuel and energy efficiency as well as consumer enthusiasm for environmentally conscious products suggest several growth opportunities in the automotive industry, he notes. “We see a lot of opportunity for [diesel] in the U.S., because a diesel engine (with a high pressure direct-injection system) consumes 30 percent less fuel than a traditional gasoline engine and emits roughly 25 percent fewer greenhouse gas pollutants. We are close to launching injectors designed for injection pressures of more than 2,000 bar, which will further increase diesel efficiency.”

Other auto-related energy efficient technologies include the company’s engine-management systems for natural gas and alcohol-powered cars and its Smart Electronic Start/Stop System, which saves fuel by automatically stopping a car’s engine when the car is in neutral and restarting it when a driver applies pedal pressure.

But Bosch seems most interested in broadening its base beyond the automotive sector. Marks points to both industrial technology where the company dominates as an independent producer of wind turbines and thermal systems solar panels and geothermal heat pumps for the home as two growth areas. “We still see growth potential in automotive, but industrial technology has even more growth potential,” says Marks. “And then thermal systems, because North American households will have the need for more efficient heating and air conditioning systems. So we see tremendous growth potential there.”

Finally, a joint venture with Siemens AG aims to bring Bosch products into as many kitchens as cars in the U.S., largely by appealing to the growing consumer enthusiasm for energy efficient appliances. “The key for home appliances continues to be improving on efficiency and energy consumption,” says Marks. “Obviously you can’t have a dishwasher that doesn’t use any water, but you can get to the stage where it’s remarkable how little water it uses. And that’s the key for us as we continue to make [incremental improvements].”
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