IN the last decade or so, pundits have observed that drivers of the global economy have shifted to Asia, away from the traditional centers of economic power in the Western world. China and India alone are expected to account for half of the global output, growing at rates of 7 percent to 9 percent.

Given this backdrop, it is no surprise that companies worldwide are looking at the region for growth. For technology company Robert Bosch Inc., this means redirecting sales and achieving double-digit growth in the Asia-Pacific.

“One of Bosch’s targets is, in the year 2015, to have 25 percent of this turnover in the Asia-Pacific Region. We are currently at about 15 percent,” said Franz Roland Odenthal, president and managing director of Robert Bosch Inc. (Philippines), in an interview with BusinessMirror.

“So double-digit growth is expected in each and every country in the region [including the Philippines].”

In 2006, according to the company web site, sales of Bosch in Europe accounted for 65 percent of its global business. Its sales in the Americas accounted for 19 percent, while sales in the Asia-Pacific and the other regions accounted for 16 percent.

Opportunities

ROBERT Bosch Inc., headquartered in Gerlingen (near Stuttgart), Germany, has three lines of business: automotive, consumer goods and building technology, and industry and trade products and services.

Its automotive business includes car service, car parts and accessories, automotive technology, and diagnostics for repair shops. Its automotive technology includes, among others, gasoline and diesel systems, chassis systems control, electrical drives, starter motors and generators, car multimedia, automotive electronics, and steering systems.

Bosch’s consumer and building technology sector includes power tools for DIY (do-it-yourself) enthusiasts, garden tools, household appliances, heating (thermotechnology) products and security systems. One of the country’s national artists, sculptor Napoleon V. Abueva, uses Bosch power tools for his works.

Lastly, its industry and trade sector includes automation technology and packaging technology.

Achieving double-digit growth across these various lines of business would entail exhausting the challenges that the Philippines presents. Odenthal, however, prefers to call these challenges opportunities.

“In all of our segments, there are still opportunities when it comes to distribution,” said Odenthal. “The Philippines is a country of many islands, so there are still opportunities to develop bigger dealers, bigger clients on the farther islands. This is Davao, Cagayan de Oro, to mention a few.”

Aside from expanding its physical presence in the country, Odenthal hopes that in the near future, new and better products could be introduced in the Philippine market.

“There are big opportunities for bringing in new products to the Philippine market. Bosch, as a European country, is very focused on Europe [but] is setting up production in the Asia-Pacific,” he said. “So from these new sources, [the company expects] quite a number of new products which will fit the Philippine market.”

Innovation and expansion

THE Philippine Clean Air Act of 1999 provides for specific targets relating to the reduction of air pollution and improvement of air-quality levels. This piece of legislation gives emphasis primarily to pollution prevention “rather than control and provide for a comprehensive management program for air pollution.”

This legislation, Odenthal says, is one driver for Bosch’s business in the Philippines, especially in helping vehicle owners conform to the standards of the law.

“The domestic automotive sector is dominated by Japanese, and more and more Korean, and maybe in the future, Chinese cars. So there, Bosch is not as strong as maybe for European cars,” said Odenthal.

“But with all our R&D and factories in the region, especially China, Japan, Korea, we have a sufficient supply of products for [Asian cars].”

What is more interesting, however, for the Philippine market, Odenthal revealed, is the after-sales service business. “Bosch worldwide has about 10,000 to 12,000 Bosch car-service stations, which are independent franchise service stations that provide the car users or the owners a very high sophisticated level of service,” he said.

“We see quite a potential [in this area], especially if we look into the implementation of the Clean Air Act.”

At present, Bosch does not have a manufacturing base in the Philippines. It does have a factory for power tools in Penang, Malaysia, which has been making power tools especially for the Asian market since the year 2000.

“Its objective is to produce power tools which are light and smaller, because usually the hands of the Asian people are smaller than Europeans. [By innovating], only then could you really conquer a market segment that is far from the reach of your competitors,” said Odenthal.

Adapting and innovating have been practiced by Bosch not only in relation to its markets, but in its very organization as well.

“Bosch is constantly changing. We are learning as a company,” said Odenthal. “For example, we found out and decided that it doesn’t make sense to maintain exports and marketing departments in Germany, so we are moving these people into the region.

“So we are basically working in the same region together. This needs adoption of lour local organization because now colleagues are much closer, know-how is more available.”

Odenthal insists that even as Robert Bosch Inc. is a global company, it belongs to that league of international players that “act local,” that is, paying attention to the market’s particular strengths and the opportunities they bring. For a company that has been in the Philippines for over 80 years, that should not be hard to come by.

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