Bosch is betting on ESP
The worldâ€™s largest auto parts company â€“ Germanyâ€™s Boschâ€™s pace of monopolizing the Chinese security system is accelerating. On November 27th, the company opened its winter auto testing center in Yakeshi, Inner Mongolia. The testing center will provide ABS (anti-lock braking system) and TCS (traction control system) for vehicle companies in China and Asia-Pacific region. Match and test with active safety systems such as ESP (Electronic Stability Program).
The Yakeshi Testing Center is Bosch's largest global testing facility with the largest footprint, highest investment, and highest technical standards in the world. It can undertake up to 70-80 test projects each year in the center. In the future, almost all of China's own brand cars will Businesses will all become Bosch customers.
Dr. Schwiner, president of Bosch Chassis Control Systems, said that this winter, the testing center has launched a number of cooperation projects with host companies in China, and about 40 engineers will participate. With the opening of the Bosch Yakeshi Test Center, the northernmost region of Heilongjiang Province and Inner Mongolia Autonomous Region will become a gathering place for many auto parts companies' winter testing grounds.
Bosch is also increasing China's ESP hardware production while improving its ability to match tests. In 2005, the Bosch Chassis Control System began production of ESP at its Suzhou plant. Up till now, there are three flexible ABS/ESP production lines. In 2010, this number will reach five, and the annual production capacity will reach 2.5 million sets.
As the world's largest ESP supplier, Bosch now has an absolute leading position in the Chinese ESP market with a market share of more than 50%. For Bosch, it is still necessary to enlarge the scale of the entire Chinese ESP market. Dr. Schwiner said that with the promotion of Bosch, China's ESP assembly rate is expected to reach 18% by 2012.
The main method for Bosch to expand ESPs on a large scale is to reduce costs and selling prices. According to the reporter, a new model must be equipped with ESP. From the ESP concept design, system development to the completion of the matching test, the vehicle manufacturer needs to pay about several million to tens of millions of yuan, and due to technical requirements, matching time, and vehicle condition. The difference has increased. Among the ESPs made by Bosch for a vehicle model, the average matching cost is about 2 million yuan.
However, Bosch stated that it is developing some lower-cost ESP systems, and the 9th-generation ESP that the company will put into the market in 2011 will have a higher price/performance ratio. At present, the localization rate of ABS, TCS and ESP in China is about 60%, and it will increase to 90% in 2010. With the increase in the degree of localization and the expansion of market size, ESP costs will decline.
The government benefits from a joint electronic model
Bosch is determined to bet on China's ESP market and is closely related to the functional management department's active promotion of ESP. According to the reporter, China Automotive Technology and Research Center has formulated some standards for ESP. The improvement of the standard will make ESP promotion possible. However, Bosch related sources said that in recent years, the Chinese government may not legally require new vehicles to be equipped with ESP.
Bosch and the Chinese governmentâ€™s parts and components cooperation can be traced back to 13 years ago. On December 25, 1995, Zhonglian Automotive Electronics Co., Ltd. and German Robert Bosch GmbH established Joint Automotive Electronics Co., Ltd. in China. Introduced and produced a complete set of components of Bosch's gasoline engine control system (EMS), and matched and calibrated the engine and vehicle.
During the "Eighth Five-Year Plan" period, in order to effectively solve vehicle exhaust emissions problems, reduce energy consumption, and improve the technical level of China's auto industry, under the support and promotion of relevant state ministries and commissions, SAIC, FAW, Dongfeng, Beiqi Wuxi Weifu and other eight domestic companies Joint investment in the establishment of China United Automotive Electronics Co., Ltd.
The model of joint automotive electronics can be said to have achieved success to some extent. This joint venture company not only provides matching support for domestic automakers, but also forms certain system integration, hardware, software, and component development capabilities. Its self-developed small engine system is also exported abroad.
Both Chinese and foreign shareholders decided to increase capital by more than one billion yuan after the joint venture company was established ten years later, expand the company's technology center, and strengthen local development capabilities. Of the 75 hybrid vehicles demonstrated during the 2008 Beijing Olympic Games, 70 were engine management systems developed and produced by United Electronics.
It is only the first step of Bosch's Chinese market strategy to help China master gasoline engine technology through United Electronics. Through long-term cooperation with related functional departments, it will be Bosch's real wish to assist China in promoting Bosch's automotive safety system standards and promote its core business expansion such as ASB, TCS and ESP.
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