However, when Bosch functions in the context of an OEM (Original Equipment Manufacturer) in the car manufacturing business, it trips up -- especially in North America. The company’s failure to aggressively brand the technologies it has created has led to a severe market share loss, according to Waldemar Pfoertsch, an International Business professor at Pforzheim University in Germany.

Binder agrees. “In the automotive industry, the motor has the same importance as a chip in a computer,” he explains. “But, even under the assumption that Bosch would produce motors, it would require an immense brand power created by unique product performance.”

Deller suggests that branding considerations weren’t as strong in the early days and are now next to impossible thanks to the way the industry works. In contrast, the computer business matured during an era of increasing sensitivity to the value of branding, which gave rise to Intel’s strategy. “It would be great to replicate [Intel’s success in the automotive industry],” says Deller, “but it’s 80 years too late to do it.”

But Pfoertsch insists that the auto industry “needs a new way of working together, and the lead could come from consumers. The OEMs view the car engine as critical, but the consumer views brakes, comfort, safety, etc., as critical; they assume the engine works. Branding should be different in this business.”

But should branding on cars reach the point where our cars look like they belong on a NASCAR track? Binder points out that OEMs only manufacture about 30 percent of the vehicles themselves, outsourcing the rest in increasing quantities, including the research and development. “Were all these parts branded by the suppliers,” Binder says, “cars would be covered with a lot of brand names. We automatically associate the manufacturer with how a car performs, both when it works and when it doesn’t.”

Bosch’s Deller seems to agree. “If I tell you that our 1800 bar Diesel injection pump has splendid performance, what do you make of it?” he asks. “Probably nothing. If I tell you that the BMW 730 is equipped with it, you can appreciate the power.”

In the end, the branding issue in the automotive business may truly be one where the product is more than the sum of its parts, and companies like Bosch may be tilting at windmills if they plan to individually brand each of the parts they manufacture. Still, one could easily argue that Bosch is missing an opportunity to associate its name with, for instance, the power of that BMW 730.

It has already missed opportunities in the areas of anti-lock brakes and electronic stability. Instead it continues to capitalize on its strong association with spark plugs, which most consumers don’t even think about when they buy a car (and those who do care can easily and relatively cheaply replace those parts after purchase).

“Bosch needs to brand or they will just become one of many,” says Pfoertsch. “They’re working on it internally, but it will take a long time because they move slowly.”

Deller acknowledges this, saying that a “dedicated team is working on brand recognition in automotive. As is Bosch’s way of doing things, this does not happen with a lot of noise but with much more discretion.”

Perhaps too much discretion. Binder takes a much dimmer view of the brand: “Today Bosch is operating worldwide, but almost nobody takes notice of it.” That’s not a strong position for this old-line brand. It remains to be seen if this early pioneer in the automotive field will see out another century.    

[8-Sep-2003]