The Hindu Business Line : MICO-Bosch to supply locally made CRDi systems to Suzuki

As per its projections, MICO-Bosch expects its first year sales for common rail diesel systems to be about 40,000 and the payback period to be between five and six years.

Bangalore , Jan. 26

SUZUKI, which will start making diesel engines from its Indian plant next year, will be one of the first customers of MICO-Bosch's locally made common rail diesel injection (CRDi) systems.

MICO-Bosch's General Manager for R&D application, Dr Gerhard Ziegler, told Business Line that while pumps and injectors will be supplied out of Bosch's plant in India, sensors and rails will be imported from Germany. The complete system will be assembled in India and sold to Suzuki, which will start rolling out diesel engines from its plant near Delhi from 2007.

Dr Ziegler said even Scorpio, the sports utility vehicle from Mahindra & Mahindra which has been fitted with imported Bosch CRDi systems will have domestically produced parts from 2007.

Another customer, Ashok Leyland will also source CRDi systems from Bosch for its trucks. Dr Ziegler said the common rail high-pressure pumps will roll out of the Bangalore factory from the middle of this year. Bosch's Nashik factory has already started producing injector pumps and some of these have already been exported to South Korea, he said.

Dr Ziegler said Bosch has already announced Rs 800 crore more for investments into its Indian subsidiaries. In 2004, Bosch announced an investment of around Rs 1,000 crore in India. The total investment of around Rs 1,800 crore will be for a period of four years starting 2005.

As per its projections, MICO-Bosch expects its first year sales for common rail diesel systems to be about 40,000 and the payback period to be between five and six years.

According to Dr Ziegler, components produced in India will lead to huge cost savings for the company, which will boost sales in the Asian market. According to industry estimates, for Bosch, it costs around 100 euros to produce a critical component of a CRDi system in Germany. Once the company starts manufacturing CRDi systems in India, the incremental cost is expected to come down by 15 per cent to 20 per cent. This would lead to doubling of its sales in the next two to three years.

MICO-Bosch also expects its exports to grow at 30 per cent CAGR till 2006, while the export contribution to total sales is expected to grow from 15 per cent to about 20 per cent by 2006.