As an old Tier1 giant, Bosch's performance is still very stable.
Recently, Automotive News released the 2024 Top 100 Global Auto Parts Suppliers list, and Bosch still holds the top spot, ranking first in sales to global automakers in 2023.
In the context of the wave of electrification and intelligence, and the increasingly fierce competition in the auto market, Bosch was anxious, but under the change, it still maintained its fundamentals and achieved further business growth. More importantly, in the process, Bosch has been constantly changing its gameplay and gradually laying out a new chess game for the future, which is related to the Chinese market, its business focus, and its core business of software......
"China's automotive market is very important"
Bosch has always made no secret of the importance it attaches to the Chinese market, especially the Chinese automotive market. This is evidenced by the fact that over the past 10 years, the Bosch Group has invested more than 50 billion yuan in China, with an average of 5 billion yuan per year.
At the 2024 Bosch Technology Day held recently, Bosch once again expressed its sincerity to the Chinese automotive market.
"Whether in terms of market size or technological development, the Chinese market is indeed very important." Dr. Steven Hartung, Chairman of the Board of Management of Bosch Group, said this in an interview with Gasgoo and other media.
Dr. Steven Hartung, Chairman of the Board of Management of Bosch AG; Image courtesy of Bosch
He said that there are two major trends in the Chinese market: first, in terms of intelligent interconnection, Chinese users have a very high demand for advanced driving assistance functions, and they are willing to pay for it; Second, the development of electrification in China is very rapid and leading.
According to Dr. Mathias Pillin, Chief Technology Officer (CTO) of Bosch Intelligent Mobility Group, Bosch is in a leading position in the market in both high-end intelligent driving and electric drives.
In terms of high-level intelligent driving, based on the Bosch global software platform and cooperation with local partners in China, Bosch has increased the development speed and can quickly achieve mass production and delivery. It is reported that from the project to the realization of mass production, Bosch only took 18 months.
In terms of electric drives or axles, Bosch has achieved a high degree of standardization and industrialization in the Chinese market, which enables it to mass-produce these standardized solutions and apply them to vehicles at a rapid scale-up.
"China is the fastest growing market in the world and is setting the pace to some extent, and we need to follow this trend as well." So says Mathias Pillin.
At present, Bosch has established strong local R&D capabilities in China to support business development in China.
"China is an innovation base and a leader in emerging technologies. Out of market demand, we have established software development capabilities in China. Now, we are developing innovations in China that can be shared with other markets around the world, which is transformative. ”
Taking hydrogen energy technology as an example, it is understood that Bosch has developed hydrogen fuel cells in Europe, and at the same time has a team in China to develop this technology independently.
Stefan Hartung mentioned that compared to other markets, China has the largest number of commercial vehicles equipped with hydrogen fuel cells, "In China, we have worked with partners such as Qingling to put hydrogen fuel cell commercial vehicles into the market, and the scale is unmatched in other markets. ”
Of course, he also stressed that in the Chinese market, Bosch must always maintain maximum competitiveness and rapid development, "We are not compared with Germany or the United States, but with competitors in China, which is our pursuit." ”
"Bosch will support Chinese manufacturers in entering the European market"
In the Chinese auto market, it is difficult not to pay attention to the trend of Chinese cars going overseas. In recent years, Chinese car companies have become more and more aggressive in going overseas, but challenges are also emerging.
On June 12, the European Union disclosed the level of temporary tariffs that will be imposed on Chinese electric vehicles. Among them, BYD, Geely and SAIC, which have already cooperated with the sample survey, will be subject to tariffs of 17.4%, 20% and 38.1% respectively; A weighted average tax of 21% will be levied on Chinese EV producers who cooperate with the EU survey but have not yet been sampled; Other Chinese EV makers that do not cooperate with the investigation will be subject to an additional 38.1% tariff.
Image source: European Commission
It is reported that the European Commission has contacted the Chinese authorities to discuss the preliminary countervailing findings and decisions, and to explore possible ways to address the problems identified in a manner that meets WTO requirements. If discussions with the Chinese authorities do not lead to an effective solution, the tariffs will be formally imposed on July 4 in the form of guarantees on top of the EU's existing 10% tariff (the exact form will be determined by the customs of the member states). Meanwhile, the EU's countervailing investigation into Chinese EVs will continue until Nov. 2, at which point final tariffs, usually for five years, could be imposed.
In Stefan Hartung's view, this is not a good solution, as it will eventually be passed on to the end user, who will pay a higher price, which will have a detrimental effect on consumers and the growth of the business.
He said that the tariffs have not yet been implemented, and he hopes that they can be properly resolved, "I hope that everyone will not fall into a situation where they all raise tariffs, because it is not beneficial." ”
Aside from the impact of tariffs, he also mentioned that the European market has always been very competitive. There are many differences in the European market, for example, Germany and France are very different, and the markets of different countries have different language and cultural backgrounds and have different consumer preferences, which is the complexity of Europe. But there are common principles across different markets, such as user orientation in Europe. "So the question is, what kind of car does the user need."
In his view, the Chinese market is technologically diverse and complete. Chinese manufacturers should think more about how to target their customers and how to price them, so that they can decide which of the many vehicles and technologies to enter the European market and which segments to succeed in.
Of course, he also stressed that Bosch will fully support the development of Chinese manufacturers, just as it has supported European manufacturers to enter the Chinese market, and it will also support Chinese manufacturers to enter the European market. "We provide them with technology and products that, based on our knowledge of the local market, help Chinese manufacturers adapt their functions to local user needs, or assist with market access certification. We're here to support them when they need it. The cooperation between us is very good, not only in the Chinese market, but also seamlessly in overseas markets. ”
"Bosch will not participate in all areas of the automotive value chain"
It should be pointed out that whether it is in the Chinese market or overseas markets, Bosch does not want to "take it all".
"We have our own clear strategy and will not participate in all areas of the entire automotive value chain, after all, this will require a lot of money and resources." Stefan Hartung points out that for Bosch, business focus is very important.
Dr. Markus Hein, Member of the Board of Directors of the Bosch Group and Chairman of the Bosch Smart Mobility Group, said that electrification, automation, in-vehicle computers, software services, hydrogen and semiconductors are all areas of focus for Bosch and have achieved a leading position in the market.
Dr. Markus Hain, Member of the Board of Directors of Bosch Group and Chairman of Bosch Smart Mobility Group; Image courtesy of Bosch
He added, "The development of the business is not a single linear, but a multi-point investment and convergence, which drives the rapid growth of the business. We want to continue to invest in these key areas of focus and continue to innovate to lead the market of the future." ”
Of course, it cannot be ignored that in the new automobile era, the boundary between OEMs and suppliers has gradually been broken, and the tide of "self-development" of car companies has risen, and it seems that it is difficult for suppliers not to be affected.
In this regard, Markus Hayne said that there has been a long-standing discussion about vehicle companies independently developing vehicle software architectures. However, according to its observations, although some vehicle companies want to develop their own full-stack, they ultimately choose to do it with partners.
As he said before, more and more OEMs have realized that full-stack self-development and maintenance at the software level requires a lot of effort and cost, and they hope that suppliers like Bosch can provide them with some solutions. On this basis, they have to do some things of their own, otherwise it is very laborious to rely on their own research and development.
According to him, Bosch basically cooperates with all vehicle manufacturers. "In the era of software-defined vehicles, there is a lot of software programming work. From the perspective of vehicle manufacturers, some of these software are not very differentiated. In this area, we are often the preferred partner of our customers. In addition, we often have an important role to play and contribute to safety-critical software systems. In short, each OEM has a cooperation with us, but with a different focus. ”
Stefan Hartung also mentioned, "We do a lot of in-vehicle computers, but we don't do interactive software, because the in-car interaction between the car and the end user, different brands of cars are often different, and iterate quickly." Bosch focuses more on hardware and underlying architecture development, while user-facing top-level applications are done in collaboration with customers. ”
"Software has become one of the most important pillars of Bosch's business success"
"Increasingly, the starting point for designing and developing new models will be software."
"The boom in software will reshape the automotive industry."
At this Technology Day, Bosch repeatedly emphasized that software drives innovation in all areas. Bosch currently employs about 48,000 software engineers, 42,000 of whom focus on smart mobility solutions. By the end of 2030, Bosch expects its software business to generate sales of several billion euros.
"We are at the dawn of the software-defined vehicle era." According to Markus Hayne, this is good news for Bosch, which knows both hardware and software inside out, "We are one of the few companies that are fully versed in the interplay between automotive electronics and cloud computing." ”
At this technology day, many innovative products and solutions from Bosch were unveiled, which greatly demonstrated the strength of its software and hardware.
For example, Bosch helps fleet operators avoid vehicle failures and improve usage efficiency with software and service solutions such as vehicle health. For logistics companies, Bosch's L.OS digital platform facilitates the digitalization of logistics operations and the simplification of the entire operational chain. In addition, Bosch has developed a special software, "Electronic Comfort Braking", which prevents unpleasant frustration when braking.
Software-defined mobility will also go hand in hand with the transformation of the automotive architecture, that is, the distributed information technology and E/E architecture will be transformed into a centralized, domain-controlled architecture. The architecture includes a very small but powerful number of computers and sensors. Currently, a car contains about a hundred control units from different manufacturers. In the software-defined car of the future, control functions will only need to be performed by a dozen on-board computers. For this purpose, domain-specific functions need to be integrated into modern in-vehicle computers.
Bosch cockpit and driver fusion solutions; Image courtesy of Bosch
Against this backdrop, Bosch and Qualcomm jointly launched a new in-vehicle computer earlier this year that integrates infotainment and driver assistance functions for the first time. For OEMs, this means not only reducing the footprint and weight of the installation, saving wiring harnesses, but more importantly, reducing costs. Bosch has already made business progress in the field of advanced in-vehicle computers: In the past three years, in-vehicle computers have generated almost 4 billion euros in sales for Bosch.
However, whether there are a hundred or a dozen, these diverse in-vehicle computers and software packages must be connected to each other in order to communicate across brand boundaries. Bosch ETAS offers middleware for this purpose, i.e. translation software between the vehicle's physical components and the application software from different suppliers. Just as almost every car is equipped with Bosch parts today, Bosch says that every car on the road in the future will also run Bosch code.
"The next step will be to implement a large model to take autonomous driving to the next level"
"In the Chinese market, L2+ and L2++ intelligent driving solutions are very marketable, and consumers like them very much, especially young consumers are willing to pay for them. And even though the price competition pressure in the automobile market is very strong today, intelligent driving functions are still very marketable. Stefan Hartung said.
At the same time, L3 autonomous driving is also imperative, and there are deep development opportunities. However, at present, there are still many challenges.
"We are in a complex traffic environment, especially on China's urban roads, where traffic is busy and complex, and driving in them requires great attention and challenges for the system," said Stefan Hartung. The system will always have more safety boundaries and do not want to cause any accidents to people or vehicles, which makes it very challenging to fully achieve Level 3 autonomous driving. We don't want this kind of out-of-control situation to happen because of some completely unforeseen circumstances that the system can't handle and quit. ”
Of course, he also mentioned that highways are a good scenario for high-level autonomous driving to be implemented in a relatively more controlled space, but there are still some risks, "We need to control costs (to make them affordable for consumers), which is a compromise that we have to make, but we definitely don't compromise on safety and performance." ”
Mathias Pillin argues that AI is a game-changer in the industry. According to him, a few years ago, Bosch decided to move away from traditional computer vision and switch to deep learning capabilities. Now, the deep learning feature on the camera has received very positive feedback. "Our next step will be to implement large models, because we believe that with the advent of large language models, large models, we will be able to advance autonomous driving to a higher level."
He also reminded that the key issue with AI is to ensure safety, and in terms of computer performance, AI is resource-intensive, but cars can't accommodate a lot of large servers, so these high-performance computing devices need to be brought into the car, "From the perspective of the automotive industry, by solving these problems, we will also add value to the industry." ”