Bosch, a leading global supplier of technology and services, ended its 2016 fiscal year with close to RM610 million (133 million euros) in consolidated sales, making Malaysia the second largest revenue contributor for Bosch in Southeast Asia for the second consecutive year.
The company’s headcount in 2016 grew by four percent to around 2,700 associates.
Simon Song, Managing Director of Bosch Malaysia, sees good opportunities for future business: “The progressive growth of the IoT industry means momentous change and huge new potential for businesses. In this area, Bosch is now making our products web-enabled and ready to provide our customers transformative solutions that help to make a difference in enhancing the competitiveness of their businesses. This will be key to Bosch to further our growth in the country.”
He added, “In addition to developing and offering connectivity-based solutions tailored to customer needs, we lead by example as users of connected technology with the gradual retrofitting of our manufacturing plants with Industry 4.0 modules to increase our efficiency and productivity.”
To further strengthen Malaysia as a location for global manufacturing as well as research and development, the Bosch Group invested close to 138 million euros into the country in the past five years – over RM160 million (35 million euros) alone in 2016. “To meet growing customer demand for our products, the increased investment was channeled into upscaling our production capacity,” said Simon Song.
For example, the company directed investments into growing the engineering team of its Car Multimedia division, and enhancing manufacturing operations for its surface mount technology (SMT).
The new SMT facility, which was opened in March last year, aims to increase production volume to support rising market demand, as well as facilitate more research and development projects. The expansion will enable Bosch to supply a broader array of services for customers locally, regionally and globally.
With the launch of a Bosch branded virtual store Bosch also embarked on e-Commerce in Malaysia in 2016 – a first for Bosch in Southeast Asia. This venture has opened up new business opportunities with customers, allowing the company to expand its reach directly to customers, beyond its traditional business-to-business model. Having launched its first online store on Lazada with the Automotive Aftermarket, Power Tools and Security Systems divisions, the company expanded its presence in e-Commerce to 11Street. In 2017, Bosch aims to enter other key virtual shopping platforms in Malaysia.
In 2016, Bosch was presented the Safety Technology Award: Innovative Motorcycle Technology for Safer Riding by ASEAN NCAP, recognising the company’s continuous effort in innovating safer riding with two-wheeler technologies such as motorcycle antilock braking system (ABS), motorcycle stability control (MSC), and side view assist.
With around 18 road fatalities per day recorded in 2015 in Malaysia according to the World Health Organization, the country has the third highest road traffic fatality rate in Southeast Asia. More than 60 percent of road accidents involves motorcyclists.
“The vision of Bosch for the future of mobility is ‘zero accidents, zero emissions, and zero stress’, which is why we will continue our efforts in 2017 to strengthen awareness about active safety. Beyond Electronic Stability Program (ESP), we are committed to drive home the message of the life-saving need for active safety technologies such as Autonomous Emergency Braking (AEB), Blind Spot Detection (BSD) and Lane Keeping Assistance (LKT) in vehicles. We will continue to advocate vehicle safety awareness to the grassroots via initiatives similar to the first Auto Women’s Workshop that we hosted in line with the ‘One Wrong Part Ruins Everything’ campaign,” said Song.
The Mobility Solutions business sector recorded the highest growth for Bosch in Malaysia. Driven by market trends of connectivity, autonomous driving, and expansion of production and engineering capacity, the Car Multimedia division achieved double-digit growth. Looking ahead towards connected devices, the division will focus on the production of Connectivity Control Units (CCU) for markets in China, Europe and North America to facilitate automated emergency calls (eCall) in cars and motorcycles.
The Automotive Steering division, earmarked to be Bosch’s manufacturing production hub in Southeast Asia for Mechanical Steering Gears (MSG), similarly recorded a double digit growth, mainly attributed to the strong demand for MSG in Japanese vehicles worldwide. The Original Equipment business was steady in 2016, with an encouraging first quarter sales performance in 2017, boosted by the introduction of new vehicle models in end 2016. The Automotive Aftermarket division saw healthy sales growth in 2016, due to the success of its new range of flat-blade wipers and lubricants.
The Power Tools division saw stable growth in 2016, supported by its e-Commerce business platform and innovative marketing concept of the Bosch Power Box, a mobile shop at Forest City located in Johor Baharu, which is one of the biggest construction sites in Malaysia. This year, the division will be launching 20 new products, ranging from grinders to high pressure washers. The Power Tools manufacturing plant exceeded its outlook for 2016 with strong double-digit growth, backed by the successful production of 17 new products.
The Drive and Control Technology division continued to face a challenging market in 2016, reflecting the global decline in mechanical engineering, as well as the oil and gas sector, in addition to the carving out of the company’s pneumatic business. Overall, sales in the division took a slight dip compared to the previous year.
In the Energy and Building Technology business sector, the Security Systems division posted nominal sales growth in 2016. The Thermotechnology division saw a decline in 2016, largely due to the delayed realization of acquired projects, hence recording a significant growth in the first quarter of 2017.
Bosch Group: Global strategy and business outlook for 2017
For 2017, in light of a subdued economic outlook and geopolitical uncertainty, Bosch aims to achieve sales growth of between three and five percent. And despite still heavy upfront investments in safeguarding the company’s future, results are set to rise.
“Business success today gives us the leeway to shape tomorrow’s world,” said Dr Volkmar Denner, Chairman of the Bosch Board of Management.
“As an innovation leader, we are shaping and driving transformation,” Denner added. The focal points of this transformation are changes in the mobility sphere and IoT connectivity.
By 2020, all Bosch’s new electronic products will feature connectivity. The key to this is artificial intelligence (AI). Over the next five years, Bosch will be investing 300 million euros in its own center for artificial intelligence.
In Asia Pacific, Bosch recorded a hefty 8.3 percent increase in sales in 2016 to 20.8 billion euros (exchange rate adjusted +12 percent). Bosch now generates 28 percent of its total sales revenue in Asia Pacific compared to 27 percent in the previous year.