In spite of the economy

This is illustrated in the company's focus on categories such as gasoline and diesel fuel management systems, he says, in an exclusive interview with Aftermarket Business magazine. Coolidge, whose tenure with Bosch dates back 20 years, discussed many hot-button industry issues, including our impending fuel crisis, the global economy, the burgeoning role of electronics and what technological advancements and new products present the greatest opportunities for the aftermarket industry.

Coolidge joined Bosch in 1988 as an intern. He has worked in Corporate Planning and Controlling in North America and Europe and was a plant and divisional controller in the North American OE Division. Prior to becoming president of the Automotive Aftermarket Division, Coolidge served as the division CFO and its vice president Aftermarket Sales and Supply Chain Management. He also serves as chairman for Bosch's Canadian operations.

What is your assessment of business in the aftermarket for 2007? Based on 2007 and your intelligence you have regarding 2008, what kind of year can the aftermarket expect in 2008?

Discretionary automotive purchases in the DIY area declined. However, expenditures in the DIFM sector were slightly stronger, indicating the more unavoidable service and maintenance was still performed. On a positive note, we are witnessing an increasing level of industry collaboration but still not to a desirable and efficient level. Further, there seems to be a more proactive defense of intellectual property rights.

Now that you've commented on the overall aftermarket, please comment on how you think Bosch will perform in 2008 and the reasons behind your thinking.

From a global perspective, we expect 2008 to be another successful year, with over-proportional growth in the Americas and Asia-Pacific. We believe Bosch will have another year of growth in North America, and will outperform the aftermarket in general. We expect sales of many of our core products such as spark plugs, wiper blades, fuel injection components and rotating electric to increase in 2008. Further, we expect good growth in filters and diagnostic equipment, which have been recently strengthened through acquisitions.

In addition, in the coming year, we intend to accelerate the growth of Bosch Diagnostics, which, we believe, to be one of the greatest needs and richest growth opportunities in today's aftermarket. We feel we are uniquely positioned to provide both "parts and bytes" as we call it. This will be further enabled through an enhanced and expanded Bosch Service network in North America.

From a higher level, how do you think the aftermarket will be affected by some of our current economic challenges, such as the sub-prime mortgage crisis, rising gasoline prices, loss of manufacturing jobs, weakening of the dollar, etc.? (Please comment on each of these specifically, as well as any other economic challenges).

We don't expect any one economic factor to be pivotal. The performance of the national economy is an amalgam of developments at many levels, and influenced by a combination of factors. Economic challenges, such as rising fuel prices, the sub-prime lending crisis and the housing market crisis will likely continue to reduce disposable income, increase uncertainty and reduce consumer confidence. Consumer spending will likely continue to be adversely impacted. I think most see this happening. This will likely include discretionary spending on auto parts. However, overall we project that the aftermarket will still achieve a low growth.

Automotive trends in general, and sales of automotive parts and service in particular, have proven to be surprisingly resilient, affected more by the longer life of OE-installed parts overall than any one specific economic issue. In general, we expect older cars will be on the road longer, thus increasing the vehicle population, and miles driven will be essentially unchanged. So, it's reasonable to expect that the aftermarket will remain essentially a low growth market in the short-run.

Some politicians and analysts have suggested that what we need to curb usage of fossil fuels is a tax upwards of a dollar a gallon. Do you agree with that? If not, what is the answer for this nation to become energy independent? At what price point do consumers curb their driving behavior to include only essential travel?

Taxation is a matter that's really the purview of politicians and economists, not parts manufacturers. However, we, and others in the automotive industry, generally agree that the number of miles driven on a national scale has leveled off. So, clearly, increased fuel costs are having an impact on driving habits. As with most issues, it seems unlikely that a single factor, such as a specific price point for fuel, will precipitate a drastic and immediate change in driving patterns. Any change is likely to be incremental rather than abrupt.

I don't know the answer to energy independence in the United States. Actions such as campaigns to increase consumer education and awareness of the problem and its consequences, incentives to change consumer behavior and government incentives for more efficient engine design and higher usage of alternative fuels, as well as better technology and use of renewable energy forms, all seem to be beneficial toward this end.

I do know that increasing fuel efficiency is a top global priority. Toward that end, Bosch is doing all it can at both the OE and aftermarket levels to promote optimal fuel efficiency. At the OE level, we are designing and manufacturing the most efficient engine management systems ever produced, for both gasoline and diesel engines. We are able to transfer many of these cutting-edge technologies to the products we offer in the aftermarket so that older vehicles can benefit from the efficiencies of newer technologies.

Two specific examples exist in the area of fuel management. Our innovative EV- 6 (and some EV-14) fuel injectors are now offered for retrofit into vehicles that originally came with first-generation EV-1 injectors. Likewise, our line of quiet, highly efficient and reliable in-tank turbine electronic fuel pumps for fuel injected vehicles includes coverage for many vehicles which were not originally fitted with these new innovative fuel pump designs.

Bosch is a significant supplier to domestic OE and Asian OE carmakers. How does this involvement affect the availability of replacement parts? What kind of balance are you trying to strike between the OE business and the replacement parts business?

As the world's largest automotive supplier, Bosch works continuously to create synergies between our OE and aftermarket activities that ultimately benefit the motorist. Bosch engineering and development activity and Automotive Proving Grounds — where we test vehicle systems such as ABS, electronic stability control, rollover mitigation etc. — are located in Farmington Hills, Mich., and nearby Flat Rock.

Their proximity to Detroit automakers' development centers allows Bosch engineers to work in close partnership with our OE customers to design and deliver products customized to their individual needs. This not only puts us on the cutting edge of new technology but also in the best position to apply that knowledge and experience in designing premium quality parts for the aftermarket.

As a result, parts for older vehicles often get the benefit of newer technology. It is no coincidence that in 2006 our aftermarket group conducted a major press conference at the Farmington Hills R&D facility in order to show the synergies between our OE R&D work and the continuing improvements we make in the replacement parts we offer.

At the Farmington Hills mechanical lab, for instance, starter output tests determine if the output of Bosch starters meet and/or exceed the customer's specifications. Reverse engineered competitive products are not put through such rigorous testing. In the same lab, on-car and off-car cold temperature testing of alternators at -40 degrees Fahrenheit, with vehicles running accurately, represents real-world operating conditions. These tests demonstrate how Bosch alternators operate effectively in extreme conditions with reliability in all possible environmental conditions.

Bosch's industry leading windshield wiper systems are subjected to wet cells/ environmental cells/thermal shock/salt spray tests that establish wipe quality and corrosion resistance under various conditions. Bosch blades are more durable and offer a longer performance life than other replacement and most OE blades as a result of such rigorous testing.

Our engine dyno lab tests spark plugs under actual running conditions, showing how our spark plugs are tested and cataloged for various vehicle engine applications. Extensive product testing is key to maintaining Bosch quality.

At our Bosch gasoline performance lab, the fuel injection test stand demonstrates fuel distribution through rails and other components to illustrate precise control of fuel flow in real-world circumstances. These and many other tests verify the design criteria specified by the customer and ensure that Bosch products meet the stringent emission demands of governmental agencies.

All Bosch products are built to meet the highest engineering and environmental standards in the industry today. This helps explain why we are not just the world's largest auto parts supplier to OEs and the aftermarket, but also one of the largest OE and aftermarket suppliers in the U.S.

Let's talk about specific product lines. Can you tell us the trends of your current product lines with regard to technology and how you go to market, including the kind of value-added support you provide resellers? Also, are there any new products on the horizon that you can share with us (if not, how about product areas?), and how will you go to market with them?

Because of evolving technology, replacement intervals for some of our products have become longer. Take for example, the oxygen sensor. Bosch invented the first oxygen sensor for automotive use in 1976 and, over the years, has continued to perfect it. Until 2005, sales of oxygen sensors grew rapidly. Now, with oxygen sensors lasting much longer, as opposed to 30,000 miles in the past, sales are leveling off.

The same goes for electric fuel pumps for fuel injected vehicles. While they lasted for five years in the past, they now last for 15 to 20 years. So sales of these product lines have leveled off despite there being more vehicles on the road using these technologies. Wiper blades, however, are continuing to grow with three blades per vehicle in many cases. The market for cabin air filters is growing with the increased rate of OE installations and growing consumer awareness of their presence and the need for regular replacement.

The growing complexity of automobiles, including the growing share of electronic components, is the key trend driving the field of vehicle diagnostics and the repair of modern cars. In fact, not only are vehicle systems becoming more complex, there are also many more vehicle types and platforms. With Bosch Diagnostics, we now offer the highest quality tools that help technicians do their jobs: scan tools, technical support, help hotline and training, combined with high quality parts — a total package from a single source.

By supporting our installer customers with training and diagnostic tools needed for today's complex vehicles, we project increased sales of Bosch diagnostic equipment, and we believe service providers will demonstrate their loyalty to their partnership with Bosch by specifying our replacement parts to perform repairs needed as a result of their diagnosis with our equipment and support.

Other recent product lines are Beissbarth chassis service equipment and Purolator filters, both offered, coincidentally, via acquisition, a topic I'll touch on later in the interview. We're expecting great things from Beissbarth and Purolator as we integrate them into our product mix and support them with our sophisticated category management programs and proven sales and marketing resources.

Looking forward, we expect substantial growth for our ESC system, first in OE installations, and later in the independent service sector as these vehicles age. The U.S. is the first country to mandate ESC from model year 2012. The decision was based on a comprehensive study conducted by the U.S. National Highway Traffic Safety Administration (NHTSA). According to the study, equipping all vehicles with ESC could potentially prevent 9,600 deaths and 240,000 injuries each year in the United States. The study also reveals the consequences of accidents that could be avoided with ESC cost the U.S. economy $11.4 billion.

We are also beginning to see driver assistance systems, which offer motorists a directly perceivable bonus in safety and convenience. Examples are semi-autonomous Park Assistant, Adaptive Cruise Control and Predictive Safety Systems. In the coming years, we can also expect to see new occupant protection safety systems, secondary collision systems and other safety related technologies. So we expect to provide our customers with the parts and diagnostic tools needed to service these emerging technologies.

While we're on the subject of support, we know of the Bosch Car Service and Bosch Diesel Service Center programs. How do they work, and how do they enhance the loyalty of professional technicians to their Bosch parts supplier? Where do you go to from here with these and other programs?

Our network of service shops is an important building block of our success strategy. Bosch Car Service is the largest independent repair shop network in the world, with more than 13,500 service centers in more than 140 countries. In the United States alone, there are 1,350 shops with a total of 1,550 shops if you include Canada and Mexico. We are estimating that, by 2010, many more independent repair shops in the United States and in North America will have become connected to our repair shop network. The network of Bosch Car Service centers is increasing steadily in Latin America, Europe and Asia as well.

In recent years, the Bosch service organization has become the most modern service provider in the vehicle service sector. Across the globe, we are setting demanding standards for quality and professionalism that a repair shop must demonstrate before we admit it to our network.

For instance, here's what we look for before approaching an independent automotive service facility to see if they might be interested in, and qualify for, the Bosch Car Service program. We seek a facility that is easy to find, a free-standing building, a facility that is neat, clean and well organized, a customer reception area, no sales of new or used vehicles, no sales of non-automotive products and no franchise agreements. Participating shops must have a minimum of two service bays. They must also have certain levels of diagnostic and service equipment, plus specific technical training and expertise, as well as demonstrating superior business practices.

With the expected growth of diesel-powered cars and trucks in the United States, we have instituted our Bosch Diesel Service Center program to ensure that motorists can find and patronize shops with demonstrated and dependable skills and credentials in servicing diesel-powered vehicles supported, of course, by Bosch, the unquestioned leader in diesel service, parts and technology.

Over the long term, we plan to extend our Bosch Car Service repair shop network further. Through this program, we ensure that all our customers receive high quality service consistently for gasoline and diesel injection systems.

As a technology leader, please speak to the areas of technology that are developing the fastest. How will these developments impact those in the parts distribution industry? Will we see fewer SKUs due to more replacement assemblies vs. individual components?

Electronics is a key component in the development of modern automotive technology and therefore systems integration and "smart" technologies emerge.

In fact, today's vehicle is essentially a "computer on wheels." With the number of electronic components on a vehicle having increased dramatically, the ability to perform comprehensive diagnostics has become a critical function for any vehicle repair shop. These days, it can happen that even a simple oil change cannot be done properly without vehicle inspection and testing, not to mention the highly sophisticated testing required for a state-of-the-art direct diesel injection system.

Subsequently, Bosch believes that some of the greatest opportunities in the aftermarket today lie in the field of diagnostics. Diagnostics does not only mean having ultramodern equipment for thorough inspection and testing. It also provides the corresponding vehicle intelligence and expertise, combined with the latest software, quality parts and key services for repair shops such as service training and hotline support.

All these components were incorporated into the development of our Bosch Diagnostics program. Our global Bosch Car Service network provides us with direct feedback on the needs of our customers so that we can always gear our efforts to support the real, day-to-day working conditions in the repair shop.

A diagnostic code or a "check engine light" for one system malfunction may turn out to be a problem actually caused by a different system malfunction. This really can make finding and correcting the real culprit much more difficult for today's technician. Due to the increasing use of Controller Area Networks or CAN, vehicles today have many computers that supply various bits of information to each other.

To have any chance in diagnosing today's vehicle problems, shop technicians must be well trained and skilled in using the proper diagnostic tools. In the example of vehicles with CAN, the technician must make sure all the computers are online and communicating with the vehicle. He checks this with the proper diagnostic equipment.

The shop must not only have the proper diagnostic tools, the technicians must be allowed to take advantage of the training available from various sources such as manufacturers and industry organizations. Also, the shop needs to know that the parts needed for repairs are readily available and that the distributors the shops turn to are helpful in identifying and supplying the parts needed. In this day of a myriad of more complex vehicles, the technician is also constantly running into the need for an indication of where a part is located on a particular vehicle and what it looks like. This should be available to him in an e-catalog, in parts catalogs, on posters and other support material.

We want to continue developing Bosch Diagnostics on the global level. In April 2007, we took a significant step in this direction by acquiring Beissbarth GmbH, based in Munich Germany, and Sicam s.r.l., based in Corregio, Italy.

Beissbarth's primary focus is on chassis and axle alignment, as well as brake test stands and test lines. Sicam manufactures tire service equipment. The amalgamation of Beissbarth and Sicam will significantly expand Bosch's product portfolio with chassis alignment equipment and tire service equipment for the independent aftermarket.

Optical axle alignment offers huge potential benefits for the future. Coupling this technology with diagnostics enables the integrated maintenance and repair of modern chassis systems, such as those equipped with active steering or electronic shock absorbers. We've joined this market in the early stage so we can be the benchmark in the field of high-precision axle alignment. The tire service business rounds off our product range for repair shops perfectly.

According to the 2006/2007 Equipment Purchasing Trends report based on a nationwide survey and published by the Automotive Aftermarket Industry Association (AAIA), "Quality continues to be the most important factor for repair shop owners, service managers and technicians when it comes to current and future equipment purchase decisions." And delivering quality, efficiency, comfort and safety are top priorities at Bosch.

Based on your economic outlook, do you think we're in danger of falling into a recession? And if that happens, there's no doubt that fewer new cars will be sold because consumers will be more cautious and lending will tighten. The ultimate question, then, is how will the aftermarket be affected? Is it recession-proof in this day and age?

Certainly the danger exists, and the economy is likely slowing, but I suspect measures will be taken to avoid that. There are just too many factors influencing the U.S. economy for us to voice an authoritative opinion here. We will leave economic predictions to those who do so for a living.

I would suggest, however, that while the U.S. aftermarket is not recession-proof, it is certainly recession-resistant, because there is a certain urgency with many aspects of automotive service and maintenance. Much automotive service and maintenance is mandatory and must be performed regardless of economic conditions. PMVI programs also mandate that safety systems be kept in good repair. Coupled with Americans' clear preference for travel by personal vehicles, we believe the U.S. aftermarket will be less affected by possible economic downturns than other industries.

Staying with this higher level thinking, what is your view of the global economy, and what does it mean for manufacturers like Bosch? And what does it mean for our distributor and retailer readers?

The global economy is evolving and, in general, is in a mostly favorable state. With rapid growth in emerging markets, economic globalization has been continuing to pick up speed and gain in depth.

For Bosch, international presence is a great advantage — especially in the automotive sector. Despite punishing price and cost pressures with regard to raw materials, we are expecting an overall sales growth of 4 to 5 percent for the Bosch Group worldwide for 2007, thanks in large part to rapid growth in the emerging markets.

Beyond 2007, we expect even stronger growth in this sector. The ongoing debate on climate protection is a major catalyst. As a technology services company, we can see opportunities more than ever before.

Ecological globalization calls for the economical use of resources all over the world. It is for us to use our innovative strength to respond to this challenge.

Innovation has been a key driver of success for Bosch ever since the company was founded. Platinum spark plugs, oxygen sensors, the electric windshield wiper system, diesel and gasoline direct injection are some of the groundbreaking technologies pioneered by Bosch that have changed the driving experience for the average motorist.

But the demands today are not only about lower fuel consumption and lower emissions but also for accident prevention and occupant safety levels. In all of these areas, Bosch has been and continues to be the driving force by virtue of our innovative strength and focus.

For this reason, our automotive group has spent far higher than the average for the industry on research and development. In 2006 alone, the company spent approximately 10 percent of its automotive sales on R&D, filing 14 patent applications, on average, per day. We expect this trend will continue in 2007 and 2008 and beyond. As a result, Bosch has the largest number of patent applications not only in Germany and Europe but also here in the United States.

We have begun a practice of sharing our pioneering achievements worldwide. ESC is an excellent example. ESC will be on 100 percent of new vehicles in the U.S. in 2012.

The point is we offer the industry's largest auto parts R&D budget, the largest R&D team, and therefore, the greatest offering of parts and service resources in the industry. All of these resources are available to our customers, and we are committed to promoting their success and projecting as far forward as we can project.

Many resellers are bypassing brand name manufacturers by directly importing parts. How is Bosch addressing this issue — specifically, what value-added propositions does Bosch afford its customers not to directly source offshore in LCCs (low-cost countries)?

We are aware that some large resellers are exploring and, in some cases, actually sourcing product directly from so-called low cost countries. We appreciate their pursuit of lower cost product and, of course, we share their interest in reducing costs. The U.S. aftermarket has evolved into a very efficient system. Most parts for most vehicles are available on a same-day or next-day basis, at very reasonable prices. And, in many cases, the repair shop technician or his motorist customer can choose from several options in terms of product design and cost.

Our spark plug portfolio and our offering of wiper blades and filters are just a few examples. Contrast this with the lack of immediate availability of replacement parts for other kinds of products where there may be a significant wait, especially for older models.

In fact, in the course of becoming the largest automotive supplier in the world, we have already pursued virtually all viable avenues in order to secure the most competitive pricing for parts that meet our very high standards.

Because of our global footprint, and because we have been making and sourcing parts for more than a century, we believe we have, and will continue to have and supply, the highest quality product at the most competitive prices. We have developed a sophisticated category management program that optimizes product design, manufacture, and pricing — in essence, a full range of supply side management practices that make our products extremely competitive and desirable.

In addition, we provide industry-leading training and technical support that, of course, would not be available to an organization that is sourcing product directly. It would be challenging at best for resellers to try to re-create these many initiatives. So we believe that our value-added features, coupled with the reputation of the Bosch brand and the service provided by our extensive and very knowledgeable and experienced sales force, will continue to make ours the products of choice for distributors and retailers.

Many automotive products have lost their brand identity and have become commodities. What do you think created this situation? Do you think it has damaged the aftermarket? Why or why not? Just how important is brand for distributors? Repair shops? Consumers? How has Bosch distinguished its products in lines that are commonly perceived to be commodity products?

We would agree that some automotive product lines have come to be viewed as commodity products. We have avoided this perception by engineering innovative products and aggressively promoting their unique features and benefits, thereby distinguishing our offerings from those of our competitors.

We attribute much of our success to our extraordinary investment in R&D programs that provide our products with unique attributes. As mentioned earlier, in automotive technology, we invest roughly 10 percent of our sales back into R&D programs. This exceeds, by far, the average for our industry.

Put another way, out of the entire Bosch workforce of 260,000 associates worldwide, some 30,000 are directly involved in R&D activities — more than 10 percent of our people. Nearly half of our up-front investment is directed toward products and programs that help protect the environment and conserve resources. Other programs address occupant safety, comfort and convenience and vehicle performance.

The results have been groundbreaking products and systems that have had significant impact on motorists' driving experiences. Bosch developed the first high-voltage spark plug (1902), the first electric windshield wiper system (1927), the first mechanical gasoline fuel injection system (1952), the first electronic gasoline fuel injection system (1967), the first automotive oxygen sensor (1976), the first platinum spark plug (1983) and the first four-electrode platinum spark plug (1998).

With these and other technologies, Bosch has effectively created and established the premium market segment for products sometimes perceived as commodities, offering parts stores, service providers and motorists choices not available in "commodity" products.

Our industry is struggling with industrywide collaboration on a number of fronts, most notably, data standards. What is Bosch's present position with regard to data standards, and where do you think this effort will end up for the aftermarket? For Bosch? To drill down a bit, does the internal supply chain software integrate with the distribution system at large?

Bosch has taken an active role in supporting AAIA standards over the past several years, and our participation on industry committees is helping the development and promotion of universal parts classification standards that provide real-time information in the customer's hands and speed the flow of information from Bosch to distributors, service dealers and motorists.

We are also updating internal systems to support emerging automotive aftermarket standards, which will utilize 52 attributes to match a vehicle's year, make and model together with the engine, chassis, brakes, transmission and other components.

Going forward, we feel that through the use of more uniform aftermarket standards we will not only improve our, as well as the industry's, ability to quickly react to data requests from our customers, but also be able to streamline our internal management of product information.

Additionally, in the past, the automotive aftermarket has been separate from other industries with regard to its data standards. Bosch supports initiatives already underway to leverage the synergies in other industries to align the automotive aftermarket more closely with traditional retailers. Overall, the cataloging requirements and the ACES (electronic cataloging) standard are unique to the automotive industry, but from a PIES (product information) perspective, a lot of the information included in ACES standards is also part of standards used in retailing and other industries.

Automotive retailers sell a lot of the same products as the big box retailers, which opens up the possibility of aligning the industries with an overall standard that would afford both suppliers and retailers an easier and more cost-effective method of data synchronization.

Combining these standards would allow global companies such as Bosch the ability to communicate more efficiently with their affiliates in other countries using similar interfaces.

What are your expectations for the Purolator filter business jointly acquired from ArvinMeritor in 2006? We know you're not going to share other acquisitions that you may be considering, but is it safe to assume that you will look at other acquisitions in the aftermarket? In what areas?

The synergies between our joint venture Purolator Filters NA LLC and Bosch hold great potential for our customers. The Purolator brand has tremendous equity and recognition in the aftermarket, and Purolator oil and air filters, along with other Purolator filtration products, fit very nicely with our existing Bosch offerings. Certainly it is our intent to continue to market under the Purolator brand.

As for our acquisition strategy, it is no secret that the Purolator brand came to us by way of acquisition, as did the Vetronix (now Bosch Diagnostics) line of diagnostic equipment and, more recently, the Beissbarth line of chassis service equipment and Sicam tire service equipment.

Pending antitrust approval, the Bosch Group intends to acquire Holger Christiansen A/S, which will be integrated into the Automotive Aftermarket division as part of the future business unit "Bosch Exchange." With this acquisition, Bosch is strengthening its position as a remanufacturer of starters and alternators and extending its product segment of automotive spare parts for the aftermarket with the Cargo, HC Parts and Bosch brands.

While I am not at liberty to say which other companies or which types of companies we are looking at, I can say without hesitation that we are always looking for possible acquisitions that represent a good fit with our core businesses, and we will certainly announce promptly any such acquisitions that may develop.

In the meantime, we'd like your readers to be among the first to know that we will be introducing this year a full line of brake system components, with full lines of brake pads and rotors following the introduction of our new line of wheel speed sensors for vehicles equipped with ABS and/or traction control. We have offered brake system components globally for some time, and we are now ready to launch this product line within the NAFTA marketplace.

Consolidation is continuing in the marketplace at the manufacturing and distribution levels. What do you think the impact is at both levels? How about how it impacts Bosch? Do you have to approach the market differently today? Why or why not?

Consolidation is a double-edged sword. While to some degree it diminishes competition, it also offers greater economies of scale to consolidated organizations, whether manufacturer or distributor.

And consolidation offers the power and resources to accomplish things that a smaller organization cannot. Obviously, our history demonstrates that consolidation at the design and manufacturing level can benefit the entire automotive supply chain.

Product quality and availability are enhanced, as we have become business partners with those who sell and install our products. We have prospered in consolidation while some other organizations have not. So growth does not assure success, and it's clear that growth must be carefully managed to yield success. Yet it's clear that our strategic planning, coupled with the most capable strategists, engineers, manufacturing, sales and marketing people in the business, have allowed us to prosper.

Within the distribution community of auto parts wholesalers and retailers, the issue of consolidation is somewhat different. Again, large organizations enjoy some economies of scale. However, in selling to service shops and DIYers, the personal touch common in smaller parts stores can be a significant advantage.

So the opportunity for larger chains is to project more personal attention, and the opportunity for smaller chains and independent parts stores is to partner with suppliers who can provide the sales, marketing and sales support programs, as well as recognized brand equity, that can help keep the playing field level for resellers of all sizes.

More than a century of industry service

The Bosch Group is a global supplier of technology and services. In the areas of automotive and industrial technology, consumer goods and building technology, some 260,000 associates generated sales of 43.7 billion euros, or $54.9 billion, in fiscal 2006. The Bosch Group comprises Robert Bosch GmbH and its roughly 300 subsidiary and regional companies in more than 50 countries. This worldwide development, manufacturing and sales network is the foundation for further growth. Bosch spends more than 3 billion euros, or $4.3 billion, each year for research and development, and in 2006 applied for over 3,000 patents worldwide. The company was set up in Stuttgart in 1886 by Robert Bosch (1861-1942) as "Workshop for Precision Mechanics and Electrical Engineering."

In North America, the Bosch Group manufactures and markets automotive original equipment and aftermarket products, industrial automation and mobile products, power tools and accessories, security technology, thermo-technology, packaging equipment and household appliances. Bosch employs 24,750 associates in more than 80 primary and 20 associated facilities throughout the region with reported sales of $8.8 billion in 2006. For information, visit www.boschautoparts.com.