Business Overview

-In recent years, the Company has been expanding its activities in the development and manufacturing of products specifically designed for the Chinese market and conducting these activities locally in China.

-The Company conducts its business in the following areas: diesel engine systems, gasoline engine systems, automotive electronics systems, electric drive systems, and chassis systems.

Business Overview for FY2012

-In 2011, the Group generated consolidated sales of 42.3 billion yuan in China, an increase of 13 percent over the previous year’s result. Specifically, the automotive technology division had 24.9 billion yuan in sales in 2011, up 7 percent from the previous year. The Company has approximately 2,700 employees working in 13 technical centers across its three business sectors: Automotive Technology, Industrial Technology, and Consumer Goods and Building Technology. The Company also invested 4.1 billion yuan during the year, primarily on production expansion projects. Major development projects in 2011 included the Denoxtronic 6.5, an economical Selective Catalytic Reduction (SCR) exhaust gas aftertreatment system which meets the China IV standard. In 2012, about 30 percent of the company’s total investment was targeted at the Asia Pacific region. The Company intends to maintain a yearly investment of 3 to 4 billion yuan in China alone. In the field of electric mobility, about 120 engineers are dedicated to developing technologies for new electric vehicles to achieve the national goal of advancing energy saving and emission reduction technologies. In February 2012, the new Bosch Chassis Control plant was constructed in Chengdu. (From a press release, April 2012)

Business Overview of Subsidiary

-Shanghai ZF Steering Co., Ltd., a subsidiary of ZF and the Company, generated sales of more than 6 billion yuan in 2012 through the sale of over 3.3 million steering systems. This was a 60 percent increase in sales compared to 2011. The subsidiary is now planning a third manufacturing facility to supply its products to automakers such as Shanghai GM, Shanghai GM Wuling, Dongfeng Motor, Changan Ford and FAW-VW (Chengdu). ZF Shanghai Steering Systems (Yantai) Co., Ltd., produced its 13 millionth hydraulic steering system in December 2012.  The Yantai Plant has also increased production of electric power steering systems with a dual pinion design. In 2012, production and sales of these systems reached 1.5 million units, a significant increase from the 640,000 units produced and sold in 2011. In August 2012, the Company started production of a column-type electric power steering system (EPSs) for installation on the Roewe E50 electric car built by SAIC. ZF Shanghai Steering also opened a new research center in May 2012. The research center is larger than any of the group’s other R&D facilities outside its headquarters. The new research center employs 230 engineers and has already acquired 35 patents, with 12 more currently being filed. (From press releases issued by multiple sources on March 4, 2013)

Diesel engine systems

New Plant

-In November 2012, Bosch Automotive Diesel Systems Co., Ltd. broke ground for its new plant at the Qingdao High Tech Development Zone. The Qingdao facility would be the second production facility for Bosch Automotive Diesel Systems. The company agreed to invest 1.6 billion yuan into the project. The Qingdao facility will develop clean diesel technologies and produce common rail injectors for both commercial and passenger vehicles. (From a press release, November 30, 2012)

Weifu raising funds for facility expansions

-Weifu High-Technology Group Co., Ltd., a partner company to Bosch, issued new unquoted securities to raise funds for the following projects:

1. A planned 650 million yuan will be invested towards developing and commercializing the WAPS common rail accumulator-type distribution system. The investment will also go towards increasing production capacity for components of common rail diesel systems. Production capacity is expected to reach 200,000 WAPS systems and 11.8 million common rail parts components.

2. A planned 260 million yuan will be invested into Wuxi Weifu Leader Catalytic Converter Co., Ltd. towards commercializing the exhaust gas purification system.

3. A planned 70 million yuan will be invested into conducting a process research project.

4. A planned 650 million yuan will be invested towards establishing a new industrial zone called the WeifuIndustrial Park.

5. A planned 100 million yuan will be invested towards conducting research and development of automotive power cells and their materials.

6. A planned 343.815 million yuan will be used to acquire certain interests of Bosch Automotive Diesel Systems Co., Ltd. (From an announcement by the company, February 28, 2012)

Gasoline engine systems:
Relocation of UAES's Xian Plant

-United Automotive Electronic Systems (UAES), a subsidiary of Bosch, announced that it is spending 300 million yuan to relocate and expand its Xian facility. The new plant will still be located within the same industrial complex, in a location where manufacturers are predominantly operating. The new plant will be more than twice the size of the current 26,640 square-meter facility. UAES signed a formal relocation agreement on March 28, 2012 with the industrial complex developer. First-year sales at the new plant are forecast to be 2.3 billion yuan, with pre-tax profits expected to be between 100 and 200 million yuan. (From an April 2012 press release)

UAES wins injection system business from Shanghai VW and FAW

-At the end of 2011, United Automotive Electronic Systems (UAES), a subsidiary of Bosch, was awarded a contract from Shanghai VW and FAW-VW. UAES would supply direct injection systems (high-pressure pumps and injectors) for the next-generation EA211TSI and EA888GEN3 gasoline engines, as well as controllers for the EA211TSI engines. The company expects to generate 8 billion yuan in sales from the contract between 2013 and 2018. In early 2012, the company won several contracts including a contract from Changan Ford to produce PG-U1.1 phase sensors for engines, a contract from Changan Motor for GDI engine systems, a contract from Shanghai GM for S3 systems, and an EV/DV-E project from Shanghai VW. (From a press release, January 7, 2012)

Automotive electronics products
New Company

-Bosch Corporation, through a joint investment with Wuhu Ruichuang Investment and Atech of Australia, established Bosch Car Multimedia Wuhu Co., Ltd. at the Wuhu Economic and Technological Development Zone. Bosch invested 60 percent in the new company, which will function as both an engineering center and a production base for the Asia Pacific Automotive Instrument Cluster Division. The new facility is expected to have annual production capacity of 2 million instrument clusters. After the joint venture agreement was signed in April 2012, approximately 480 employees, including 170 engineers, were transferred from Atec to the new operation. (From a press release, November 28, 2012)

-Bosch China Investment Ltd. announced that it planned to acquire a majority shareholding in the joint venture between Chery Automotive Company and Atech Australia based in Wuhu, Anhui Province, China. The joint venture develops, manufactures and sells instrument clusters and car infotainment systems. The joint venture employs 500 employees and had sales of 200 million yuan (22 million euros) in 2011. (From a press release on April 25, 2012)

Automotive Motors Systems
New Company

-Bosch China and the FAW Sihuan Group established a joint venture in Changchun, China, called Bosch Automotive Components (Changchun) Co., Ltd. The joint venture started commercial operations on October 25, 2012. The companies invested 240 million yuan in the joint venture, which was capitalized at 80 million yuan. Bosch has a 55% stake in the joint venture, while FAW Sihuan has the remaining 45%. The joint venture has an annual production capacity of 60,000 starters and 55,000 alternators. The joint venture will supply products primarily to companies within the FAW Group located in the northeastern area of China, such as FAW VW and FAW Car Co. Ltd. The joint venture is the first of Bosch’s subsidiaries in China to operate in northeast China. Additionally, the joint venture is Bosch’s second facility in China that produces starters and alternators, following its plant in Changsha. (From an Oct. 26, 2012 press release)

-Bosch Automotive Products (Changsha) started operations at its new technical center and production facility to develop and produce alternators, air conditioners, engine cooling systems, wiper systems and small motors. The facilities were constructed on a 12,760 square meter plot. The new facilities doubled Bosch Automotive Products’ annual production capacity and increased its employees to 5,000. The new technical center employed 350 engineers to fulfill domestic and international needs. By developing a strong relationship between production and development bases, Bosch intended to significantly reduce development lead-time to meet the growing demand for localized and customized solutions. (From news released issued by multiple sources, October 16, 2012) 

Cooperation

-Bosch Group (China) and Ningbo Polaris Technology Co., Ltd., a leading supplier of electric scooter motors, reached an agreement to establish a joint venture to produce and sell scooter motors. Bosch would likely hold the majority stake in the new company. The project was subject to approval by antitrust authorities, but no further details have been disclosed. In 2011, Ningbo Polaris Technology sold more than 1 million scooter motors and employed approximately 450 workers. (From news releases issued by multiple sources on August 14, 2012)

-Xin Zhi Motor Co., Ltd., a supplier to Bosch since 2010, will establish a new plant on the premises of Bosch’s Changsha facility in hopes of increasing its business with the Company. The two companies signed an agreement on the collaboration on June 23, 2012. Xin Zhi Motor will produce generator stators, micro motor rotors, starter rotors, and motor housings for Bosch. (From a press release by Xin Zhi Motor Co., Ltd. on June 25, 2012)  

Chassis systems
Relocate Brake Caliper Facility to Wuhan

-As part of its long-term R&D strategy, Bosch will move its entire brake caliper facility located in Suzhou to the Wuhan R&D District, where Dongfeng Peugeot Citroen has three production facilities. On November 2, 2012, the Company’s subsidiary, Foundation Brakes (Suzhou) Co., Ltd., began construction work on the plant. The total investment for the project will reach USD 100 million. The first phase of development used USD 50 million to construct a brake caliper plant with 10,800 square meters of floor space. The plant was scheduled to begin operations in June 2013. The new plant is expected to have an annual production capacity of 500,000 units and achieve CNY 1.3 billion in annual sales. With the new plant, the Company hopes to supply not only Dongfeng Peugeot Citroen, but also other OEMs in the west-central region of China. (From a November 3, 2012 press release)

Chengdu New Plant Construction

-Bosch officially broke ground for its new plant, Bosch Automotive Products (Chengdu) Co., Ltd., which will be located in the Chengdu Economical & Technological Development Zone in Chengdu, Sichuan Province. A total investment of USD 137 million (CNY 880 million) was made for the production site covering an area of approximately 127,000 square meters. The Company used USD 43.8 million (CNY 280 million) for the first phase of construction, which was scheduled to be completed by the beginning of 2013. After the first phase of construction, the new plant is expected to reach an annual production capacity of 1.4 million ABS/ESP systems and 19 million wheel speed sensors. The new plant is Bosch Chassis Systems Control’s second production facility in China. (From a press release onFebruary 14, 2012)

Awards

-United Automotive Electronic Systems, a subsidiary of the Company, received the following supplier awards for 2012 in January 2013.

• Best Supplier Award from SAIC Motor; 
• Top 10 Supplier Award from Changhe Automobile; 
• Excellent Supplier Award from SAIC-GM-Wuling; 
• Excellent Supplier Award from Haima Automobile; 
• Excellent Quality Award from FAW Haima; and 
• Best Supplier Award from Shanghai GM

-United Automotive Electronic Systems, a subsidiary of the Company, received the following supplier awards for 2012 in November and December 2012.

• Excellent Product Development Award from Changan Suzuki;
• Simultaneous Product Development Award from Beiqi Foton;
• Excellent Supplier Award from Dongfeng-Peugeot-Citroen;
• Excellent Development Award from BAIC Motor;
• Excellent Supplier Award, Outstanding Contribution to Development Award, and Excellent Service Man Award (given to an individual) from Dongfeng Liuzhou Motor; 
• Excellent Supplier Award from Harbin Dongan Automotive Engine; 
• Excellent Supplier Award from Shenyang Aerospace Mitsubishi Motors Engine;
• Best Partner Award for 10 years from SAIC-GM-Wuling; and 
• Excellent Supplier award from Harbin Dongan Auto Engine

(From a press release, December 2012)

-United Automotive Electronic Systems（UAES）, a subsidiary of Bosch, won an Excellent Supplier Award and an Excellent Partner Award from GAC Motor Co., Ltd. The awards were presented at GAC's suppliers meeting on May 18, 2012. (From a May 2012 press release)

-United Automotive Electronic Systems, a subsidiary of the Company, received the following awards from its customers for 2011.

• Excellent Supplier Award from Shanghai GM; 
• Excellent Supplier Award from Shanghai VW;
• Excellent Supplier Award from SAIC-GM-Wuling; 
• Best Partnership Award from Chery Automobile; 
• Best Supplier Award from SAIC Motor; 
• Excellent Supplier Award from FAW Haima Motor; 
• Excellent Supplier Award from Changan Suzuki; 
• Excellent Supplier Award from Dongfeng Liuzhou Motor;
• Excellent Supplier Award from Beiqi Foton;
• Excellent Supplier Award from Harbin Dongan Auto Engine;
• Excellent Supplier Award from Dongan Mitsubishi; 
• Excellent Supplier Award from Hafei Motor;
• Excellent Supplier Award from Shenyang Aerospace Mitsubishi;
• Excellent Supplier Award from Chongqing Changan New Energy Auto;
• Outstanding Contribution Award in Research and Development from Changan Automobile;
• Outstanding Contribution Award in Joint Development from Jiang huai Automotive Engine;
• Outstanding Quality Contribution Award from Jiang huai Automotive;
• Outstanding Contribution Award in Research and Development from Huachen Zhonghua;
• Outstanding Technical Contribution Award from Chongqing Lifan Motor;
• Best Service Award from Greatwall Motor.

(From a press release, February 24, 2012)

R&D structure

-The Company has cutting-edge technical centers in Shanghai, Wuxi, Suzhou, Donghai, Chongqing and Changsha to serve the Chinese market. The Company is active in hiring local engineers in order to quickly respond to demand from Chinese customers.

-In November 2008, the company opened its winter proving-ground in Yakeshi, Inner Mongolia.

Technical Center

Establish second plant in Qingdao

-Bosch Automotive Diesel Systems Co., Ltd., a subsidiary of the Company, will establish a second plant at the Qingdao National High-tech Development Zone. The new plant will be constructed on an 110,000 square meter plot. The new plant will produce injectors for high-pressure common rail systems to meet the China IV emission standard effective July 1, 2013. The common rail system will be used in a diesel engine, which will reduce fuel consumption by 30 percent and reduce CO2 emissions by 25 percent compared to a gasoline engine. The construction project will be carried out in two phases, with the Company investing 800 million yuan in each phase. (From a press release, March 16, 2012)

Weifu raising funds for facility expansions

-Weifu High-Technology Group Co., Ltd., a partner company to Bosch, issued new unquoted securities to raise funds for the following projects:

1. A planned 650 million yuan will be invested towards developing and commercializing the WAPS common rail accumulator-type distribution system. The investment will also go towards increasing production capacity for components of common rail diesel systems. Production capacity is expected to reach 200,000 WAPS systems and 11.8 million common rail parts components.

2. A planned 260 million yuan will be invested into Wuxi Weifu Leader Catalytic Converter Co., Ltd. towards commercializing the exhaust gas purification system.

3. A planned 70 million yuan will be invested into conducting a process research project.

4. A planned 650 million yuan will be invested towards establishing a new industrial zone called the WeifuIndustrial Park.

5. A planned 100 million yuan will be invested towards conducting research and development of automotive power cells and their materials.

6. A planned 343.815 million yuan will be used to acquire certain interests of Bosch Automotive Diesel Systems Co., Ltd. (From an announcement by the company, February 28, 2012)