Coffee with BS: Steffen Berns

He has completed three-and-a-half years as managing director of Bosch India, but Steffen Berns considers himself to be an “old India hand”, as this is his second stint in the country, albeit after a gap of 13 years. He had worked as general manager from 1996 to 1999 — an experience that came in handy when the Stuttgart-headquartered technology and services giant was looking for an India head. He grabbed the opportunity for two reasons — the challenge of independently guiding the fortunes of Bosch in a country far away from the headquarters (“global cut-and-paste templates don’t work in India”, he says) and the wonderful memories of his previous stay (“my elder daughter was born in India”).

We are at Kafe Fontana, the coffee shop at Delhi’s Taj Palace hotel, and Berns wonders why the swimming pool outside hasn’t been able to attract anybody, who is willing to beat Delhi’s afternoon heat. Berns, who is based in Bengaluru, has had a busy schedule through the day at an industry seminar — the reason why we decide to skip lunch and settle for a meeting over coffee. The India that he saw on his earlier stint has changed beyond recognition, Berns says. For example, vehicle production has increased eight times in the last decade and the density of cars per thousand people is now the same as that of two-wheelers a decade ago.

Berns says the requirements of the market here change so fast and are so different from those of other countries that a large India presence of top-quality talent is necessary. Apart from the fact that it is a highly price-sensitive market, there are a whole lot of vehicles on Indian roads that are not found anywhere else in the world. For example, small trucks with one-tonne payload require special injection systems that are invented and developed only in India. Or, take two-wheelers. The basic idea is to introduce electronic fuel injection instead of the carburettor systems that are still widely used only in India. Then there are a wide range of diesel products specific to Indian markets. The challenge that Bosch has met successfully is to develop these highly localised products at great speed.

That’s why Bosch has more than 14,000 research and development engineers at the largest centre of innovation outside Germany and filed more than 200 patents in 2015 alone. And despite the economic slowdown, it has invested around Rs 3,000 crore in the last three years. “We realised pretty early that we have to design systems for a unique set of vehicles at a very fast pace, as the development cycles here are typically much shorter. That’s where innovation comes in,” Berns says, adding that what most people don’t realise is developing consumer gadgets and auto products are completely different. “My mantra is simple. If a customer demands something, we have to deliver at the speed he wants. No customer will wait for us. That is where local top-quality talent comes in.”

Bosch uses manufacturing data at its plants in Bengaluru and Jaipur, for example, to shorten throughput time in the testing and calibration of diesel injection pumps and last year, developed an affordable engine management system that is specially designed for the booming Indian two-wheeler market. But the company, which uses the corporate slogan “ïnvented for life” isn’t walking the talk on automobiles alone, though this sector accounts for 80 per cent of Bosch’s business in India. One of its innovations, for example, is a compact retinal camera with special software that can detect conditions such as cataract at an early stage. Bosch is also tapping a whole new market by offering smart parking over the next few years. As part of this move, the company plans to launch a host of parking assistance systems that help drivers park accident-free, or even completely guide them into a space at the touch of a button. Bosch is now offering in India its scalable ultrasonic-based parking and driver assist systems that offer a whole range of services — from basic functionalities such as park assist to more complex functionalities such as park steering control and side view assist. Among its future offerings are an automated valet parking that enables cars to park themselves. Drivers can simply leave the car at the entrance to the parking garage. Using a smartphone app, they then instruct their car to find a space for itself. When ready to leave, they call the car back to the drop-off point in the same way.

Berns is upbeat about the company’s intelligent fleet management service that has features such as tracking of vehicles’ location, condition monitoring and performance analysis, which provides accurate vehicle information on smartphones and can immensely reduce everyday driving cost. Users will get instant alerts about maintenance, malfunctions, accidents or any damages that require immediate attention.

He does not agree with the view that despite all this progress Bosch India’s share of even Asia revenue remains minuscule, saying that in rupee terms the turnover has gone up 15 times in the last 20 years. Accounting for the three times rupee depreciation vis-à-vis the euro, the growth has been five times. “That’s a huge growth. The share of India business has increased, though I must admit it is still low. Look at it from another prism: the India business has high potential for growth as we are here with all our businesses, with 3,000 dealers and after-market services in 1,200 cities and towns and are looking at long-term growth,” says Berns, adding that one shouldn’t forget the growth in the automotive industry has stayed below expectations in recent years. He is politically correct when asked whether he shares the general disappointment in industry over the performance of the Narendra Modi government. “Bosch has always been realistic in its expectations and thus holds a less disappointed view. It’s too much to expect miracles from a new government,” he says with a smile.

Isn’t he worried about the government’s tearing hurry to move up to the toughest emission standards of BS-VI from the current BS-IV by 2020, skipping an intermediate level? Berns is less politically correct this time, though he chooses his words carefully. While Bosch is committed to the transition and can pull it off with smart solutions, Berns says no other country in the world has tried such an experiment. “You require four years to graduate from one stage to another. But, if you are skipping one stage, you may want to give at least six years to do that.”

Besides, development and validation of emission technologies have three phases —design and application take a year each, while validation needs two to two-and-a-half years. If these are not followed, it can lead to severe safety and quality problems in the field. In any case, directly copying the euro norms might be a problem, as the conditions in India in terms of temperature, driving cycles, etc are very different from those in Europe. “In the current scenario, it is really important we fix the boundary conditions so that we know what is BS-VI (which is not clear), and also know when the fuel is available,” he cautions. The fuel then must be tested in different vehicles that need to be developed. If it is not available, the engines are naturally not going to be clean and the entire exercise becomes ineffective. The related problem is availability of fuel from refineries two years earlier for the necessary test cycles. This is going to be an arduous task because at present, while passenger vehicle makers have been selling BS-IV variants even beyond the 33 cities where that fuel is available, heavy trucks and buses comply with BS-III norms. These vehicles travel interstate and therefore, have to refuel at BS-III stations. Using BS-III fuel in BS-IV vehicles lowers the efficacy of the engine, with the result that the objective of addressing the pollution issue by upgrading to higher emission norms remains defeated.

In the last three-and-a-half years at Bosch, Berns says he has spent a lot of time in “future-proofing” the organisation, in starting new businesses and plants and in competency building of employees — factors that will help the company when economic growth gains momentum. That surely has left him little time to indulge in his hobbies that include classical western music, hiking and water sports and travelling with family.