Asia Pacific is a region in transition: growth rates are reaching a sustainable level, in emerging markets such as China, India, and ASEAN member countries, the middle-class is growing, and with it the demand for quality products and smart technologies – established markets such as Japan and South Korea have long been global innovation leaders in this segment. The Bosch Group says it can see a number of ways of actively helping to shape this change

“Especially when it comes to connectivity, we can see huge potential in Asia Pacific. Thanks to its broad footprint, Bosch is ideally positioned to offer cross-domain solutions from a single source,” said Peter Tyroller, the member of the Bosch board of management responsible for the region, ahead of the 14th German Industry Asia Pacific Conference (APK) taking place Nov. 3-5 in Hong Kong. In 2015, Bosch generated sales of 19.2 billion euros in the region, and thus roughly 27 percent of its global sales.

Asia Pacific therefore remains a significant driver of growth for the supplier of technology and services. This also is reflected in its activities in the region, Tyroller said. “For the present year, we plan investments in our Asian locations totaling some 1.2 billion euros.” Bosch is pursuing a policy of localization in the region, having already invested some 2.5 billion euros – or roughly one-quarter of all Bosch Group investments in that period (10 billion euros) – in the previous three years. The company, which has had a presence in Asia Pacific for more than 100 years, now operates more than 60 locations in 18 countries in the region.

Market for the Internet of Things is growing rapidly

“The market for the Internet of Things (IoT) is also growing rapidly in Asia Pacific,” said Tyroller. “We forecast that the region as a whole will have the world’s greatest IoT market potential by 2020, at 37 percent.” According to a study, the market for the Industrial IoT in Asia Pacific alone should grow fivefold between 2015 and 2020. It is expected that urbanization and industrialization will accelerate Asian countries’ development, and connected technologies can play a part in this. Government initiatives are also having a great impact on the connectivity business market. With its “Made in China 2025” initiative, the Chinese government is above all supporting the widespread use of connected solutions in industry. The “Make in India” program aims to modernize manufacturing in India. As a leading supplier of Industry 4.0, Bosch offers solutions in the areas of powertrain technology and automation as well as sensor technology and software. As a leading user, the company already successfully operates pilot projects in Asia as well, at manufacturing sites in China, India, South Korea, and Malaysia.

Apart from connected industry, Asian countries also are investing in smart-city projects. Bosch offers mobility concepts as well as solutions that can connect power grids, lighting systems, traffic infrastructure and buildings, helping to improve cities’ economic and energy efficiency. Pilot projects in this area are already running in India and Singapore.

Localization as the key to success

Bosch believes that its proven “local for local” approach also is key to success in its connectivity business. This is why the Bosch subsidiaries Bosch Software Innovations, Bosch Sensortec, and Bosch Connected Devices and Solutions have been present in the local market for several years. Bosch Software Innovations was able to double its sales in the region in 2015. Alliances with local partners are also important the company says. To enable use of the mySPIN smartphone integration solution in the Chinese market, for example, Bosch is collaborating with Tencent, one of the biggest Chinese internet companies.

One important element of Bosch’s successful localization strategy is the development of products and solutions that are tailored to each market’s requirements. Roughly 20,800 (or nearly one-third) of its research and development associates are based in Asia Pacific. In China and Singapore, they are working to create IoT solutions for the local market. And the more than 14,000 Bosch R&D associates in India make up the company’s largest R&D workforce outside Germany. These Indian engineers are developing data mining and software solutions. Since the end of 2015, Japan has been Bosch’s third development location worldwide for automated driving, and a source of valuable insights in this field.

The growing regional workforce

Bosch is an important employer in the region, employing more than 104,000 people. At present, therefore, roughly one-quarter of all Bosch associates work in Asia Pacific – more than twice as many as 10 years ago. “We expect this workforce to grow to 120,000 by the end of 2016,” said Tyroller. At 55,000, China has the lion’s share of these associates, and the largest Bosch workforce outside Germany.