By Neil Halligan
Dubai’s ambitions to become a smart city fit well with Bosch’s array of technological innovations, says the German giant’s Middle East head, Volker Bischoff
The Bosch office was rather tricky to find, I was told before setting out for our meeting at its Dubai Airport Freezone office, and while satnav managed to direct me to the vicinity of West Wing 5A, finding a parking spot was an altogether different experience.
In years to come, technology will have advanced to such an extent that a parking place will have been picked out possibly before I even set out on the journey, Robert Bosch Middle East’s vice president Volker Bischoff proudly tells me, as we talk about the ‘Internet of Things’ and how it’s going to transform our lives.
It has already started in the principality of Monaco, where Bosch technology and solutions has put it on the map, so to speak, with its connected city project that started in late 2013.
Focussing initially on mobility, in one of the smallest but most densely populated countries in the world, the scheme looked to provide the city’s residents and visitors with real-time information on waste collection, bus networks, car parking management, and information on roadworks.
It allows residents to communicate with the local government without red tape. If, for example, one of the hilly city’s many elevators or escalators is not working properly, residents and visitors are able to immediately find out where there is a functioning alternative or inform services if there is a need for maintenance.
At the heart of the system are Bosch’s MEMS (microelectromechanical system) sensors, which enable the communication to take place.
Used in cars for 20 years in the ESP (electronic stability programme) anti-skid system (first supplied by Bosch to Mercedes and BMW in 1995), MEMS have been developed and used in a variety of different ways, including in smartphones and tablets, as fitness tracking, step counting, indoor navigation and gesture recognition. They are at the very heart of the Internet of Things – allowing devices that connect to the Internet to communicate information.
The car parking management solution also uses Bosch’s MEMS sensors, alerting drivers to free spaces, says Bischoff.
“We developed the technology with our sensors,” he adds. “In Monaco the public parking spaces tell you where there is a free parking space and transmit the information onto your mobile phone or onto the navigation system in your car. It would show you a map to where there would be free parking,” he says.
The Dubai Plan 2021, which aims to build a smart and sustainable city, is exactly the type of project where Bosch could add value, according to Bischoff.
“We had a couple of meetings [with Dubai officials] where we have been saying what we have been doing so far and of course we are interested,” he says.
The Internet of Things will form a key part of Bosch’s future, according to Volkmar Denner, the chief executive of German engineering and manufacturing giant. He spoke at the company’s annual results meeting about how Internet-enabled products and Internet-based services are one of the focal points of the company’s future sales growth.
A company that has been at the forefront of many of the world’s technological advancements in the 20th century, Bosch has 3,000 engineers developing its Internet of Things technologies and has recently produced its five billionth MEMS sensor at its Reutlingen factory.
A number of acquisitions in recent months give a clear indication of where one of the world’s largest private conglomerates is headed.
Bosch, which posted sales of $54.7bn in 2014 (a 6.3 percent increase on the previous year), completed the takeover of the Bosch-Siemens joint venture in January, which strengthened its position in the area of connected buildings and smart homes.
Less than a month later, Bosch fully acquired another of its joint ventures, ZF Lenksysteme (now known as Robert Bosch Automotive Steering GmbH) which will drive its growth area of automated and assisted driving.
Given the precarious driving habits of motorists right across the Middle East region, developing automated driving is an interesting concept. While it might be many years away from ever becoming a reality, Bosch is committed to developing the technology. Its record when it comes to safety will be a key factor in its innovations, says Bischoff.
“Whenever we come up with something new in terms of products, it should be beneficial for the people, not for the pure sake of doing it business-wise, but people should benefit from that,” says Bischoff. “We have come up with a lot things in the past, with the ABS [anti-lock braking system], with the ESP [electronic stability programme] - all these safety-related pieces and products that we use in the cars, which helped to reduce the number of accidents. This is something which is certainly ongoing,” he adds.
Highly automated vehicles rely on environmental information that goes beyond what sensors can gather. For instance, they need real-time traffic data on congestion and accidents, which means connecting the vehicle to a server. Bosch has developed its ‘connected horizon solution’ to enable exactly this. The system enables a dynamic preview of the upcoming route and corresponding adjustments to driving strategy. It warns drivers of potential danger spots, and gives real-time traffic data through a smartphone app. When the app is active, it uses the smartphone’s camera to detect speed limits along the way and sends the information to a server. The data is then verified before being released to other road users.
For Bosch, automated and assisted driving has been identified as a significant area of growth and 2015 will see the start of series production of remote-controlled parking and ‘traffic jam assist’ programmes, and an assistance function for evasive manoeuvres and turning against oncoming traffic.
Bosch’s core businesses, however, are still the automotive after-market for vehicle spare parts, power tools and security technology, particularly in the Middle East.
The company established an office in Dubai – its Middle East subsidiary – a little over ten years ago, but Bischoff says it has a long history in the region.
“We have been doing business in the region for more than 90 years with the traditional export model,” says Bischoff. “We had companies in the various countries that served as importers and that story 90 years ago goes back to Palestine. But as far as our own presence is concerned, this goes back to 2002 when we started with a small office here in the airport free zone. That was automotive after-market driven. It only looked after the Arabian Peninsula, so the regional scope was relatively small. It was reporting to me at that time in Germany, being in charge of the whole [Middle East] region, plus Africa,” he adds.
There were only 12 staff in Dubai as recently as 2006, but the Bosch presence has been growing steadily, with 95 now employed in the region focusing on sales, marketing and technical support. There are satellite offices in Riyadh, Doha, and Beirut, with a fourth about to be established in Lahore, Pakistan.
Business has been good in the region, with consolidated sales in 2014, across 15 countries in the Middle East, exceeding $257m, which represents a 7 percent growth on the previous year.
“Power tools is very successful - double-digit growth rates. We have a high market share. We are market leader when it comes to that,” says Bischoff.
Bosch generally has a partner in each country for the automotive after-market and power tools businesses, he says.
“In the automotive, we expect the partner - here it's the Al Fahim Group in Abu Dhabi - to implement our strategy, in terms of parts, selling them, after-sales service, and run a workshop for cars to be repaired. They themselves would appoint other independent workshops as Bosch qualified workshops, to do the repairs. In the whole Middle East we have 225 Bosch workshops and we added 50 alone in 2014 and we are accelerating that and making more headway,” he says, with 14 more planned for the UAE before the end of this year.
Bosch has been involved in a number of significant projects across the region during 2014, including the IP-based and networked public address and voice evacuation system to the Kuwait National Petroleum Company, which supported its move to improve employee safety on the refinery's premises and to streamline operations.
In 2013, Bosch designed and installed Dubai International Airport’s Praesideo public address and emergency sound system - the world’s largest.
The company also supplied engineering solutions for the Dubai’s Floating Bridge, which integrated Bosch Rexroth’s tide compensation solution, storing energy from the wave motion of the bridge in order to lift and lower the bridge.
Bischoff says Bosch is also keen on developing markets in locations where it has previously had a strong presence.
“On our radar is Iraq. We have had that since last year but due to the political developments in Iraq, we decided to put that on hold for the time being and say ‘only when the situation allows’ we will reactivate that idea. Iraq is certainly a country with potential where we believe that a local presence of Bosch will be beneficial,” he says.
The upcoming nuclear deal in Iran, should it be agreed, will also provide Bosch with plenty of scope for growth.
“Another one is Iran, for sure. We had a good presence there in the past, before the sanctions, but then we closed it completely in line with a lot of other multinational companies. Whenever it is possible again, from a legal point of view with the sanctions, then we would reopen a presence there again,” he says.
“Iran has vehicle manufacturing with Renault, Peugeot [through a joint venture with Iran Khodro] and wherever there is vehicle manufacturing, Bosch is not far with our projects in the injections or the brakes. This makes the Iran business quite a special one. Plus there would be a trade division - automotive after-market, and the power tools.
“We do some business, which we are allowed to do against the UN decision, since the beginning of last year. Automotive was reactivated so that was possible again to do the business, but on a relatively low scale. I would say also because the shape of the Iranian economy is also still not the best. It all comes down to the buying power to the currency. So far it's not possible to deal with the Iran rial freely,” he adds.
The outlook for Bosch in the region, he says, is encouraging.
“I think it’s a promising year. It has started on a very positive note. There are promising projects in the pipeline, so we are quite upbeat,” he says.
“Connectivity is a key area for us globally in 2015. And with the UAE’s ambitions for a smart, connected future we recognise the potential to become an integral enabler of that future. Our MEMS, for example, form the basis of many connected solutions and we are utilising them to make cities easier to navigate and park in, connect people to public services, and transport and allow traffic lights to respond accordingly when emergency services are passing. While the UAE is not quite there yet, our experience of deploying this technology around the world will serve the UAE well,” he says.
And so too would automated driving, but that’s probably a bit too far away to contemplate just yet.