Bosch pumps in US$200m for a diesel systems joint venture
13/8/2004 14:54
The Robert Bosch Group, the world's leading automotive supplier, started
construction of a US$200 million diesel systems plant in Wuxi, Jiangsu Province,
yesterday to tap the market for diesel automotive application in
China.
Bosch's diesel systems division paid US$134 million, its largest
overseas investment, for a 67 percent stake in the joint venture, Bosch
Automotive Diesel Systems Company. Wuxi Weifu Group, its Chinese partner, takes
the remainder.
"With the Europe III emission standards to be implemented in
China, it will bring a number of opportunities for our diesel injection
systems," said Ludwig Walz, executive vice president of the diesel systems
division.
"It's necessary to be closer to our customers and to the growing
market," Walz added.
The 300,000 square meter diesel injection system plant,
expected to be completed by the end of next year, will employ more than 2,000
employees.
An additional investment of 278 million euros (US$333.6 million),
mainly in the form of fixed assets, will be made in the joint venture by 2007 by
the partners.
The joint venture will focus on developing and producing
electrical diesel injection systems, which can help vehicles meet Europe-III
emission standards.
Wuxi Weifu, the Chinese partner of Bosch and owner of
Shenzhen-listed Weifu High Technology Co, will continue to produce all the
mechanical diesel systems and "try to gain a dominating position in the market,"
said Chairman Xu Liangfei.
But it may take time for the German-based
automotive supplier to popularize diesel engines as they're now used far less in
China than in Europe.
"The fuel quality in the country remains a major
obstacle for us to promote the use of diesel systems," said Bosch Automotive
Group chairman Bernd Bohr. "We need to convince Chinese consumers that diesel
engines are good for passenger cars."
Bosch estimated there will be more than
3 million vehicles propelled by diesel engines by 2013 in China.
Zhu Yanyan
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