Bosch aims for double-digit sales growth

JAKARTA. Germany-based Robert Bosch, the world’s largest car parts maker, has said that it aims to book double-digit annual sales growth in Indonesia, following the operational launch of its first automotive component plant in Bekasi, West Java, last week.

Bosch’s vice president for gasoline system sales, Jan Tjoa, told a press conference on Wednesday that the company’s first Indonesian plant, which began construction last year, was gearing up to supply the local automotive industry with oxygen sensors and injectors for car engines.

The facility would mainly cater to Japanese automotive manufacturers operating in Indonesia, Jan said, adding, however, that the company was open to the possibility of regional exports.

Total investment for the facility was ¤10 million (US$13.53 million).

“The initial investment and the production capacity for the facility are relatively small,” he said, adding that it was hard to provide specific details on the plant’s capacity as the products were so varied.

“But we have completed the most difficult part, which is launching the first plant. As for future investment, we will either look to proceed to the next stage of the plant or we may consider developing another facility. We are still studying the possibilities, taking into account what kind of products the country needs.”

He said that Indonesia, along with other emerging markets in Southeast Asia, was currently the company’s expansion locus given its vast population, promising car sales and gross domestic product (GDP) growth.

The Association of Indonesian Automotive Manufacturers (Gaikindo) has predicted that car sales will remain flat this year compared to last year, at around 1.2 million cars, but Jan said he was optimistic that the market would pick up and that the stagnant growth would not disrupt the company’s expansion.

Martin Hayes, president of Bosch in Southeast Asia, previously said the new manufacturing facility would be a milestone for the company’s operations in Indonesia, as well as its expansion in Southeast Asia as “the fastest growing region for Bosch”.

Currently, Bosch has six manufacturing plants spread across Thailand, Malaysia and Vietnam, manufacturing power tools, automotive components, as well as multimedia and industrial technology
products.

Bosch, which first entered Indonesia in 1919, now has branch offices in Balikpapan (East Kalimantan), Semarang (Central Java) and Makassar (South Sulawesi) to complement its Jakarta headquarters.

With the new plant in operation, together with a distribution enhancement strategy, Tang Kim Kok, Bosch Indonesia’s managing director, said the company was optimistic it could secure significant growth in the country, despite the projected economic slowdown and volatile currency.

“We will continue to secure double-digit growth in Indonesia throughout 2014, due to the country’s sustained investments in infrastructure, the growing middle class and the increasing demand for our products,” Tang said.

“We experienced strong growth in almost all our businesses in 2013, with automotive technology, security systems, and drive and control technology divisions being the main sales drivers.”

The company recorded sales totaling Rp 998 billion ($84.4 million) in Indonesia last year, which Tang said was significant annual growth but was not comparable to its 2012 figure due to “a change in accounting policies”.

The Indonesian sales contributed 11.5 percent to Bosch’s overall net sales in Southeast Asia, which hit ¤629 million last year. The figure was 5.27 percent lower than the firm’s 2012 net sales of ¤664 million, due to currency volatility in the region, Tang said. (Anggi M. Lubis)