India among Bosch's most dynamic growth markets; focus remains on cost-effective investments: Stefan Hartung

Time of India

2 days ago

Edited excerpts:
Q1. Bosch has announced a €6 billion target for software and AI revenues by early 2030. What are the top AI-powered products or platforms that will help achieve this, and what's the timeline for their mass adoption?
A:
There are so many different software initiatives we have. In the future, there will be virtually no product that is software-free. Everything will include advanced software. The challenge is that pure software businesses are difficult because many car platforms today can't run these kinds of software—but that's changing. OEMs are now adopting software-defined vehicle strategies.
One of our key offerings is a Vehicle Motion Management software package. It integrates damping, braking, steering, and linear acceleration to offer a holistic driving feel. You can adjust the car for sportiness, comfort, or safety—like an anti-seasickness mode for children or a safe mode for younger drivers. These are the kinds of software-driven features we expect to see more of going forward.
Q2. Bosch recently announced a €250 million fund for AI and energy startups. Is this about building in-house AI strength or a broader acquisition strategy?
A:
We love collaborating with startups. Sometimes, we do acquire them—but that's rare. What's more important is working with them and investing in ones we find interesting. They bring a different culture and expertise. In India too, there's a vibrant startup scene and some young people prefer startups over big companies like Google.
If we buy these startups, the original people may leave. So, we focus on collaboration, and it's a lot of fun. We have an initiative called Open BOSCH, where we give them business and help with sales, which is a big challenge for startups.
Q3. Can you share some examples of startups Bosch is working with?
A:
I've seen many investments, but I don't want to name a specific one. There are many—also in India. We work with Chinese, Singaporean, American, and European startups. We're currently operating our fifth fund — and it's going well. There is an independent investment team handling this fund that takes its own decisions.
Q4. Has Bosch been late to the automotive AI party or are you right on time?
A:
Actually, we started very early, aiming straight for full autonomous driving. But we realised it's an expensive business—you need fleets and billions in investment. So we reset our focus to assisted driving. At the same time, AI technologies like language models and sensor fusion emerged, giving us powerful new tools. Meanwhile, China adopted Level 2 ADAS at scale, and we stayed active in that market. Now, we're seeing our strategy pay off.
In India, full autonomy is challenging due to road conditions, but assisted driving will be helpful.
Q5. What made mass adoption of ADAS systems possible in China?
A:
I would say three factors--Generative AI and fusion tech changed everything and Chinese consumers quickly adapted to smart features and screen-based interfaces. Moreover, China's infrastructure is excellent—making it ideal for automotive innovation.
We're now seeing similar trends in India. Tata, Mahindra, and others are introducing smarter vehicles. People are spending more, and this will lead to wider adoption of ESP systems and assisted driving modes.
Q6. Given India's cost-sensitive market, how will advanced driving features be adopted by the mass market?
A:
It has to be mass market—otherwise it won't work. If it remains a luxury, it won't scale. The goal is to provide affordable and valuable features.
Yes, you need extra sensors and computing, so there's a cost. But by integrating systems, like using the infotainment processor for ADAS too, we can reduce cost. It's all about balancing functionality and price.
Q7. Bosch has strong investments in China. How do you manage geopolitical tensions and regulatory restrictions related to AI and data sharing?
A:
We operate independently across regions. We support global collaboration, but regulations sometimes don't allow cross-border data use. So, we have separate, capable teams in India, China, Europe, and the US.
India has a huge, talented software team, including a dedicated AI unit in Bengaluru. They are among our best.
Q8. What percentage of Bosch's global AI work is being driven out of India?
A:
I can't give a specific percentage, but we have very large teams in India—over 20,000 software professionals. Many global algorithms and platforms are developed by these teams, who are also deeply integrated with Germany and US operations.
They're highly skilled in AI development, tooling, and coding automation, and they even work on software beyond automotive—like medical and business applications.
Q9. Do you have any new high-tech or AI-focused manufacturing investments plans for India?
A:
Yes. India is evolving in electric powertrains and software applications. Our Bengaluru campus has shifted from manufacturing to software and system engineering. India is now one of our most dynamic growth markets, and we're pushing investments here, while remaining frugal and focused on volume-driven growth.
Q10. Bosch recently had layoffs. Were they related to AI transformation?
A:
No, the layoffs were more about structural shifts in powertrain manufacturing. The global market is plateauing around 90 million cars per year, and production has shifted from Europe to China.
Also, electric powertrains need 10 times fewer hours than diesel engines. Even though software needs more people, AI tools improve efficiency. So, the need for adjustment is ongoing and will continue.
Q11. How is Bosch's business outlook for 2025?
A:
It's a very challenging year. India is doing well. The US began strong but faces uncertainty. Europe is still finding its way.
The global car market is stagnating, and consumer and construction sectors are weak. The year is not over, but every sector is facing challenges.
Q12. What is your perspective on the rare earths supply issue?
A:
It must be politically resolved. Rare earths are essential and not replaceable. Everyone needs them. It's a balancing act between regulation and demand, and we hope it gets solved in the coming months.