The Automotive Aftermarket division of Robert Bosch Gmbh provides the aftermarket and services worldwide with complete range of diagnostic and repair shop equipment and wide range of spare parts – from new and remanufactured parts to repair solutions – for passenger cars and commercial vehicles. Its product portfolio includes parts made as Bosch original equipment, as well as aftermarket products and services developed and manufactured in-house. In an exclusive interview to T Murrali of Autoparts Asia, Uwe Thomas, President, Automotive Aftermarket, Robert Bosch Gmbh, describes the complexity of the aftermarket needs and solutions globally. The excerpts:-
Q: How important is ‘connectivity’ to the aftermarket; the amount of data that comes in is huge. What are the challenges in managing this huge data?
Thomas: When we talk about connected and automatic driving there are 3 layers. First of all we need things we can connect to – the car, ECU, household appliance – whatever it is.
In the second layer we need to have the applied form and IT structure where all this data can be organised and administered. The next level is data security and priority; security of data used by the customer is the highest priority.
Q: A debate is going on whether the data is owned by the user or is the property of vehicle manufacturer. For example, Bosch has given the sensors that take all the data. Someone has applied a system using Bosch sensors. So who owns it and has the right to use it?
Thomas: From a legal point it is very difficult. We have a very strong Bosch Codex when it comes to data ownership, it is our Bible. We are of the opinion that the data belongs to the consumer because his vehicle creates the data determined by his driving behaviour. We give the consumer the right to give us the data accordingly. For example, he can tell us to give the data to insurance companies A and B but not to C. Once we have the data according to the customer’s wishes we can then create new benefits out of it like data mining etc. This is one benefit for the aftermarket because we can offer fleet owners benefits on the total cost of ownership and real-time optimisation of the fleet. The Indian market is dynamic and developing fast, picking up new ideas quickly. That is why we are here from 1922.
Q: How was the aftermarket for Bosch globally in 2015?
Thomas: 2015 was a good year. We introduced new products to enter into new areas like connectivity driving, augmented reality and new technologies. The interesting thing was that developments in different parts of the world were quite different. Europe and India have been two strong drivers last year, China slowed down slightly, North America was normal with South America quite good in the aftermarket. In 2016 we expect good improvement globally; some countries like India will reach a higher dynamic.
Q: What are the driving forces for growth in 2016? Will the momentum continue in Europe and India?
Thomas: In India I think the economic conditions will stabilise. The cost of finance must come down to the level where people can spend it. The workshops and distributors should be able to get credit from the banks. However, there are huge challenges ahead. The government should facilitate investment.
Some development and progress is seen. That is why we believe that 2016 will see growth picking up in India. Europe is on a good footing with a huge car population. Other parts of the world, including China, are picking up a little. It is a good perspective for 2016.
Q: How about the Americas?
Thomas: South America is difficult. Contrary to the general development in Latin America the aftermarket is very satisfying, and promising. North America is stable. Definitely the car parc is getting older and this is something which helps us in the aftermarket.
Q: The miles-driven grew by 10-11 percent last year. People started replenishing their old cars and have tried to maintain their existing cars. This has triggered sales in OE and the aftermarket. Do you see that trend continuing in some markets?
Thomas: There is no reason to believe this will change dramatically. Fuel prices are still on the way down and income develops accordingly in a positive manner. Mobility is still an issue so the miles-driven is not likely to change, it will go up rather than down.
Q: The contrary can happen, especially in the MENA region as their economy depends on oil, which is getting affected. Some change could happen there. Will it help the aftermarket?
Thomas: It can happen but it will level out on a global level. The aftermarket may grow in some areas; there will be differences with regard to HCVs, LCVs and 2-wheelers. Different buying patterns and behaviour will drive micro-logistics.
Q: In some markets, especially in Spain and Latin America, there is a surge in the use of one-trip components. This is creating a churn in some markets. Is it a positive sign and will Bosch have an opportunity to change that trend?
Thomas: What counts at the end of the day is whether we can offer the end-consumer affordable solutions and offerings for his mobility needs. Being a very innovative company registering 18 patents every day throughout the year, we have developed certain specifications over the years for mid-price positioned products. This is needed because we want affordable solutions. If we go further down there are limits because we do not go into offerings where we cannot guarantee safety. By affordable solutions I mean if a car will run only for another 20,000kms why offer a part which will go on for two lakh kms.
Q: In the matured markets people attach more value to performance, safety and environment. At the lower end of the market they want value for just one trip. You have two extremes. Any opportunity here?
Thomas: The rules are given by the customers. The name of the game is customer- orientation. If we compare buying behaviour across different domains we should get affordable, convenient and safe solutions available in real-time on the spot at attractive prices. Either we accept these kinds of challenges in our industry or believe the industry would stay as it was 20 years ago. We are not allowed to compromise when it comes to safety. Environmental protection is another issue and we have to bring all these things together. So we have to position our brand and offerings in a way that brings product credibility to the customer.
Q: Bosch also has some performance-oriented products specifically for the aftermarket. Some innovative technologies go only to the aftermarket, not to the OE segment. Why so?
Thomas: This is the customer’s decision. We drive innovation in the OE segment as well as the aftermarket where the development cycles are shorter. If we have an idea and come to the conclusion that it makes sense for the customer economically, we introduce it and then the OEM comes to us. Sometimes they accept it, sometimes they stick to their own specifications. Sometimes we have a niche market where a special segment of customers want it. Coming from the customers, we need to address every segment of the market.
Q: How do you leverage social media for the aftermarket?
Thomas: Whether it is Facebook or Twitter, we have a corporate policy with locally adapted approaches; it is up to the regions to implement it.
Q: Is this helping you address counterfeits, since you are moving closer to the end-user?
Thomas: It helps a lot in terms of co-ordinated, well-structured flow of information because we can inform, show pictures, and what is more important, help people connect with one another not only to identify counterfeits but also give each other advice when it comes to a repair problem.
Quiet often mechanics will have some problem. We run ‘experts’ communities’ who can find solutions with our support. This interconnection is very important in the social media arena.
Q: The aftermarket is the one that supports when the OE sales are down. However, in some markets, including India, the aftermarket also witnessed a dip in sales. What, according to you are the factors that influence the market?
Thomas: It is always a question why the OE market is down. General market weakness has an impact on all sectors including transportation. The main driver of the aftermarket is still the miles driven. In India a strong part of the automotive aftermarket is still coming from HCV and Off-Highway. If we do not have production, transportation is coming down and with this no repair will take place. Compensation coming from increasing share of passenger cars. It is also due to strong impact coming from liquidity situation.
Q: What are the challenges in marketing a product in the aftermarket?
Thomas: The important challenges are the increasing complexity of products and programmes and changing needs of the customers, need for information (product, system, catalogue – paper/electronic), training, test equipment, tained technicians and availability (increasing speed), and delivery cycles. In addition, ‘service network’ is also one of the success factors. If you want to sell a product in the aftermarket you need a sufficient coverage with workshops as an important customer touch point. Bosch Automotive Aftermarket is continuously working on extending the service (workshop) network and have in total 36,700 workshops globally.
Q: What are the short-term and long-term plans of Bosch Aftermarket?
Thomas: ‘Digitisation’ is changing the market. Our response: Simple and convenient mobility solutions that are accessible at any time. But we will not just focus on new mobility solutions meeting the customer requirements of the future, we will at the same time focus on strengthening our core business of selling Parts and Bytes. We offer the complete range with “Parts, Bytes & Services”: Technical Parts, Fast Moving Trade Goods specific to the aftermarket, Workshop Equipment, as well as Workshop and Mobility Services.
It will mainly be about being as close to the mobility users as possible, speaking their language and creating important contact points to suit our customers. The “push” nature market is turning into a “pull” nature market. Our customers’ requirements are always the main focus and the starting point for developing new customised mobility solutions. We will work on establishing ourselves in the growing markets of India, China, Africa and Asia Pacific.