Bosch to produce vehicle-safety devices in Chengdu

Robert Bosch GmbH, a technology and services supplier, plans to keep investing in China this year to meet the demands of both automakers and customers in the largest market for vehicles.

That will start with the construction of a plant in Chengdu, Sichuan province, for the German company's Chassis Systems Control Division.

The project is expected to cost $137 million and will result in the formation of Bosch Automotive Products (Chengdu) Co Ltd.

Its first phase is to be finished by the beginning of 2013 and will give the company the ability to produce 1.4 million antilock-braking and ESP systems, which help prevent wheels from slipping, a year. It will also be able to produce 19 million wheel-speed sensors annually.

Ferdinando Sorrentino, regional president of Bosch Chassis Systems Control Division China, said only 15 percent of the vehicles produced in China last year were equipped with the ESP system. Globally, the figure is about 44 percent. "The acceptance and demand are increasing," he said.

This project will result in the second production site that Bosch Chassis Systems Control has in China and is in line with Bosch's plans to invest more in the country's western and central regions.

"Our insights into China's economy make us seize every opportunity to achieve sustainable growth," said Uwe Raschke, member of the Bosch board of management with responsibility for the Asia-Pacific region. "In line with the government agenda of accelerating the western region's development to drive investment growth, Bosch is strengthening the go-west strategy."

"Also, to better serve both foreign and Chinese automobile OEMs (original equipment manufacturers), we need to be closer to them. In recent years, Chengdu has become one of the most influential cities in China's western economy, as well as attracting more automakers to set up their manufacturing sites, including Volkswagen, Volvo and Toyota. It's a strategic step for Bosch to have presence here."

He said China will remain an important destination for the company's investments in the next four to five years.

"For 2012, we will keep a similar investment scale in China as last year to maintain our double-digit sales growth since 2007," Raschke said.

In April, the company said it planned to spend 3.4 billion yuan ($540 million) in the country in 2011. A final figure for that investment will be confirmed in April, the company said.

Raschke noted that Bosch China had sales of 37 billion yuan in 2010. Based on that, he said the company's sales increased to "about 40 billion yuan in 2011, contributing about 10 percent of Bosch group's total revenue".

"The market's contribution will further expand as we see a huge potential here," Raschke said. "Our confidence comes not only from China's robust economic growth, but also from Chinese people's increasing desire for safety, quality and individuality for transportation. So when we think about investment scale, China is more than a country, but a continent."

Bosch now obtains its third-largest amount of sales revenue from China, following Germany and the United States. China is also home to more of the company's employees than any country besides Germany.