Tell us about the BOSCH’s power tool division. Growth rate, revenue, products etc?
The Power Tools Division of the Bosch Group is one of the world’s leading providers for power tools, power tool accessories and measuring tools. In 2015, its roughly 20,000 associates generated sales of 4.5 billion euros, about 85% of which was outside of Germany. With brands such as Bosch and Dremel, the division stands for customer focus and great engineering progress. Our core success factors are innovative strength and pace of innovation. In 2017, Bosch Power Tools will again launch more than 100 new products onto the German market in its four business segments power tools, accessories, measuring tools and garden tools.
According to ‘Research and Markets’ report, India power tools market is anticipated to register healthy CAGR of 8.9% in terms of value, and 9.5% in terms of volume over the forecast period (2016-2026). The market for power tools had witnessed a robust growth in terms of revenues in the past few years. Indian Power tool industry is an import driven market with a large proportion of products imported in the country through countries such as China, Germany, UAE, Japan, Korea and others.
Bosch Power Tools experienced strong growth in 2016. We sold around over a million power tools. Our success is based on consistently focusing on the user. We know what their needs are and we can offer the users suitable solutions.
Bosch Power Tool is well-positioned for coming years. We see opportunities for growth in emerging markets and online in particular – for example with online sales and with our increasingly connected products.
What are the new innovations in Power Tool technology?
Innovative strength is an important basis for the success of Bosch Power Tools. In 2016, Bosch has introduced a brand new saw blade technology for do-it-yourselfers in the form of ‘NanoBlades’ technology which is based on a saw blade with a revolving micro-chain. It consists of chain links which are only four millimeters in size – similar to a chainsaw, only smaller. The revolving chain means that the pendulum movement which is typical of jigsaws and saber saws, featuring high vibrations and saw blade running, is no longer required.
With this saw, Bosch is taking sawing to the next level. Our ‘NanoBlades’ allow any user to saw easily and precisely and produce exact right angles while doing so.
There are several Power Tool manufacturers in India. How you plan to tackle the competition?
Yes, the market is highly competitive with number of organized and unorganized players. The ‘Make in India’ initiative by the government has fostered the manufacturing sector which had led many companies to open their offices and start operations in India. The expansion of distribution channels and online sales, demand from professionals, increasing inexpensive imports from China has driven the power tools market in India. The review period also witnessed new campaigns, product launches and launch of new distribution channels. For an instance the premium retail store concept by Bosch (Bosch System Specialist) has created a niche market with its positioning as a total solutions provider for Power Tools while providing customers with a delightful shopping experience.
Cordless tools with Lithium ion battery are some of the many innovations from its portfolio.
Recently there has been a lot of buzz about E-commerce in industrial goods. What % of your overall sales comes from E-commerce and how do you see the future of industrial E-commerce business?
Future of Industrial ecommerce business — B2B E-commerce in India is in line with the government’s digital growth plans. Online B2B can be a wide platform with lots of scope. However, there are many hurdles it faces along the way – apart from policy ambiguity, B2B works on thin margins, hence, there are concerns about its scale and operation. In developed and developing markets, the E-commerce industry continues to evolve and experience high growth. With the emergence of non-banking players in the payments industry and innovative vertical specific start-ups, the Indian E-commerce market is expanding at a rapid pace.
How is Bosch Power Tools taking advantage of the ‘Make in India’ Program?
The power tool market in India had witnessed a robust growth in terms of revenues in the past few years. The market is highly competitive with number of organized and unorganized players. The ‘Make-In-India’ initiative by the government has fostered the manufacturing sector which had attracted many companies to open their offices and start operations in India.
Make in India initiative by Bosch Power Tool – The new unit in Chennai, which started producing power tools for artisans and tradesmen in the price range of Rs 2,000 to Rs 10,000, is part of the ‘Make in India’ program announced by the government to boost manufacturing. The facility, which is located close to Chennai, started humming in mid-2015. It produces more than 60 specific power tools. The production capacity from Chennai plant is 2.5 million per year. Currently, Bosch has 300 authorized service centres in the country.
Our main objective of setting up the plant was to focus on the Indian market, with product design for India. The factory caters to India and also exports the product to the SAARC region.
Where will most revenue and growth come in Fiscal 2018?
From the Construction and Infrastructure segment.
What are the emerging industries for Power Tools business apart from automotive?
Apart from automotive industry the emerging sectors are construction, energy & mining, shipbuilding, rail & rolling stock and industrial manufacturing.
Your future plans for India…
We will continue to focus on channel expansion and driving closer to the users. Our aim is to understand the needs of the end users and make sure we reach them with the right solutions and products.