Does Bosch Have the Wrong Brake-by-Wire Strategy?
The European market for the supply of electronic braking systems is oligopolistic, with Bosch and Continental Teves commanding majority share of the market. Success has been generally dictated by innovation, and Bosch has always gained its market share in this market through creativeness and novelty. It did so in the 1970s by launching ABS, ESP in 1990s, and has repeated it again now by being the market pioneer in introducing electro-hydraulic brake-by-wire (EHB). However, it is highly debatable whether it will be the first to launch electro-mechanical brake-by-wire (EMB) and whether it will repeat its braking success story with brake-by-wire systems. With over a 50 percent market share in the EBS market in Europe, Frost & Sullivan expects Bosch to also maintain the leading position in the EHB market. To date, Bosch is the only supplier of EHB systems, and it is estimated that it will have supplied around 1,800 EHB systems in 2001. Bosch and DaimlerChrysler have jointly developed the first commercial EHB system, called Sensotronic Brake Control, presently being installed as standard equipment in the new Mercedes-Benz SL-Class. DaimlerChrysler and Bosch have a symbiotic relationship when it comes to braking systems - one makes it, the other takes it. DaimlerChrysler plans to increase penetration of EHB systems in its fleet of Mercedes-Benz cars from 2002 onwards. It is expected that the E-Class will pick up EHB from 2002, and in four to five years, all Mercedes-Benz cars will have EHB systems. Bosch is expected to supply large volumes of EHB systems to DaimlerChrysler. Frost & Sullivan's recent research on X-by-wire technologies suggests that Bosch's stubborn focus on EHB may actually bring its downfall. The study suggests that EHB is a product with a very short life-cycle and will be taken over within 5 - 8 years by EMB. EMB would be in the market today had it not been held up due to slow developments in 42V, advanced protocols, and actuators/motors capable of generating the required braking force. In addition, EHB is expensive and gives no savings to vehicle manufacturers in its integration into production compared to EMB, which is expected to take large volume platforms soon after its launch. What the future holds for Bosch supplying EMB systems is less certain. Since Bosch has been investing a lot into the development of EHB and produces millions of hydraulic components used for braking, it is in its own interest to squeeze the EHB market completely in order to get a decent ROI before moving on to EMB systems. Bosch believes that the main barriers for launching EMB systems are the development of a low-cost and light wheel brake, which fits in into the designated space in the rim, and the 42V supply. Companies more dedicated to the development of EMB systems dismiss the first argument, saying that this problem is already solved, and the 42V problem is likely to be resolved either at the time of launching the system or before. One supplier even thinks it can launch EMB on smaller cars maybe even with 14V/42V. In the past, Bosch has normally had a two to three years gap with other suppliers in commercialising braking systems. Even with EHB, it has at least a two years head start. However, with EMB it might not even be the first to launch into the European market. A small niche company in the braking world - the Italian company, Brembo - is expected to spoil the fun for Bosch when they become the first company to launch EMB systems in 2004/05. Brembo, along with Continental Teves and new market entrants such as TRW and Delphi, are collectively expected to take a large proportion of the brake-by-wire market share from Bosch in the second half of this decade. The success Bosch had with the launching of ABS and ESP systems in the past might not be a guarantee for the future. Frost & Sullivan believes that Bosch needs to revisit its EMB strategy and limit its investment in EHB. The future is going to be tough for Bosch, especially if other suppliers steal the lead on EMB, and EMB takes off in Europe at EHB's expense. Despite all the negative reviews, Frost & Sullivan analysts believe that Bosch has the capability to dominate the X-by-wire market through its close association with the German vehicle manufacturers and in-house expertise in automotive motors, sensors, and electronics. Bosch occupies the leading market share in the European market for supply of these components, which are so vital to the success of X-by-wire technology. Its joint venture with ZF to supply steer-by-wire systems and leadership position in supplying power-by-wire systems puts it in pole position to launch fully integrated drive-by-wire systems. However, until then, Bosch's braking strategy is highly questionable. It is quite possible that it will do a U-turn on its brake-by-wire strategy in the near future. Bosch can, however, take some consolation from the fact that it will not be the first one to do so. These findings are a result of Frost & Sullivan's European X-by-Wire report. For more information, please contact your account executive or contact Kristina Menzefricke at kristina.menzefricke@frost.com Background Frost & Sullivan is an international marketing consulting company that monitors a comprehensive spectrum of high-tech markets for trends, market measurements and strategies. This ongoing research is utilised to complement a series of research publications to support industry participants with customised consulting needs. Interviews and free executive summaries are available to the press. For more information contact: Kristina Menzefricke, Public Relations Department Tel. +44 (0) 20 7343 8376 Fax. +44 (0) 20 7343 8380 kristina.menzefricke@frost.com http://frost.com http://pressroom.frost.com --------------------------------------------------------------------- If you would prefer not to receive further messages from this sender: 1. Click on the Reply button. 2. Replace the Subject field with the word REMOVE. 3. Click the Send button. You will receive one additional e-mail message confirming your removal.