From ROI to GDI.

Is price the only variable of importance in today's market, or are other items of equal or greater importance? We asked Berndt Bohr, chairman, Automotive Group, Robert Bosch [www.bosch.com], for his opinion on this, the company's prospects in North America, and the future he sees for Gasoline Direct Injection [GDI].

AD & P: The auto industry is in the midst of a cost reduction drive, yet the assumption among some DEMs is that Bosch is a company that produces premium-priced products in a premium-cost country--Germany. How do you convince them Bosch is the best choice?

Bohr: In general, you must have a competitive offering. That is, a combination of a competitive product and customer service, which includes engineering resources. Next, you must invest heavily in innovation. Bosch will invest 9.5% of sales in R & D this year alone, which is well above the industry average and about twice as much as the OEMs themselves invest. And that money must be used in two ways: [1] to bring new functionality to the market, and [2] to reduce costs. An example of the first is the night vision system developed for the new Mercedes S-Class. ABS, however, now falls into the second category. The work is dedicated to reducing size, weight, complexity, and cost while retaining or improving the unit's basic functionality.

We also look at our manufacturing footprint so that we have a low-cost location in every corner of the triad [Europe, Asia, and North America]. We produce common-rail diesel pumps in Turkey, electronics control units in Hungary, high-pressure diesel pumps in the Czech Republic, and have similar units in Mexico, Brazil, India and China. Plus, we are moving ahead in sourcing parts we buy--trim, rubber, plastic, etc.--from low-cost sources. However, we believe manufacturing plants in high-cost locations like Germany make a lot of sense because the plant, production process people, and engineers must have a very close relationship. In my opinion, the relationship works best when engineering development is physically close to the customer.

AD & P: How is Bosch doing in North America?

Bohr: In North America, our total automotive business is about $5 billion and growing. It includes the Big Three, as well as transplant business, though that is on a smaller scale at the moment. We are making big inroads with our diesel injection technology, and currently we equip the Duramax and Cummins light truck diesel engines with our components. Another big area of growth is Electronic Stability Control. The 2007 GMT900 light trucks--which is a very high-volume vehicle line--will use the Bosch system.

AD & P: Surely that doesn't cover the entire $5-billion you referred to earlier.

Bohr: No, but we aren't a publicly traded company, so we don't have to brag about what we are doing in order to keep our share prices high and investors interested.

AD & P: What are the prospects for growth in GDI? Is it limited to inline engines?

Bohr: Fuel prices are up, availability of fuel is questionable, and--even if things calm down significantly--the recent concern has shown the need for DEMs to have a greater balance in their available powertrain choices. Our first GDI effort was in stratified charge, but it did not go as well as expected. However, the combination of GDI homogenous charge and turbocharging has resulted in downsized engines that don't feel downsized, but bring a reduction in fuel consumption of 10% or more when judged against an engine of comparable output. That's why you see a GDI 2.0-liter inline four in place of a 3.0-liter V6 at some automakers.

A V-type engine application would have more plumbing and use smaller turbos, but it wouldn't be all bad. In fact, you could stagger the turbo sizes for a broad power band, use small turbos for faster response, or feed the opposite engine bank to balance power output. There are many possibilities, and American DEMs have shown increasing interest in this technology.--CAS