The Americas Region

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BSH[1] has been active in North and South America since the 1990s. Dishwashers produced by BSH Hausgeräte GmbH were already being distributed in North America from 1991 under the Bosch brand.[2] 1995 ruft die BSHG zum „Aufbruch zur Weltspitze“ aus.[3] A pure sales role in North America, however, was no longer enough. The U.S. had one of the largest domestic markets in the world – and the largest individual market for home appliances.[4] In 1996, BSHG established a dishwasher factory in New Bern, North Carolina, which extended over an area of 12,000 square meters.[5] However, North America is not the only one of the regions in which BSH wants to be more represented, but also in South America.

"As a leading manufacturer of electrotechnical consumer durables, BSHG has a clear objective to continue expanding its excellent market position in the coming years," explained CEO Dr. Herbert Wörner in 1995.[6]

Greater emphasis was placed on South America in the 1990s during this phase of internationalization at BSH[7]. One of the reasons for this was the high growth rates in the regions of Eastern Europe, large parts of Asia and even South America, which contrasted with the increasingly saturated markets in Western Europe.[8]

North America

Thermador

Now known as BSH, the company acquired the U.S. home appliances manufacturer Thermador in 1998 and thus integrated another high-profile brand into the BSH family. Ambitious targets were set following the acquisition. "We want to be the most competitive company in the sector. If there were an Oscar for product, service and environmental protection, BSH would get it!"[9]

It wasn't just because of their efficient cleaning performance that U.S. consumers were impressed by the BSH dishwashers, since they eliminated the need for pre-rinsing, another major plus point was the low operating noise emission level – BSH dishwashers were eight times quieter than traditional U.S. appliances.

Sales company in Canada

A sales company was established in Canada in 2005 as a subsidiary of the U.S. BSH Home Appliances Corporation.[10] This was enabled by the North American Free Trade Agreement (NAFTA) that had been ratified in 1994. The business in Canada made up a small portion of the North American business. Yet the Canadian market acted at times as a linchpin: during the U.S. financial crisis in 2008, for example, Canada recorded very positive growth rates – unlike the weak U.S. market.[11]

For the sake of the environment

By 2006, environmentally-friendly and energy-saving home appliances had become increasingly important in North America. The Bosch dishwashers already fulfilled the strict U.S. regulations concerning energy consumption a year before they were launched in 2007.[12] Bosch was also actively involved in the "Energy Star" and "Energy Guide" campaigns, where were supported by the U.S. Government in order to promote environmentally-friendly products.[13]

Additional investments in North America

In 2002, BSH began the largest factory overhaul undertaken by the company up to that point. A new laundry care and a new free-standing cooker factory were constructed from scratch. Covering an area of 37,000 square meters and representing an investment of 200 million dollars, the two new factories were BSH's largest investment outside of Germany at this time. By the time the project was completed, some 800,000 washing machines and dryers as well as 400,000 free-standing cookers were being produced annually.[14]

BSH made further investments in North America in 2007. Around eleven million dollars were invested in the production location at New Bern, in order to establish a new production line. This investment added 225 new jobs to the existing approx. 1,000 (as of 2007). "We produce where our customers are located," said Franz Bosshard, CEO and President of BSH Home Appliances, as he explained the rationale behind expanding the company's presence in North America.[15]

Financial crisis and renewed growth

Triggered by the crisis in real-estate in the U.S., the North American market suffered a considerable setback in the years that followed. The investments in modern locations and the consumer trust gained through high-quality and environmentally-friendly products now paid off. Despite the unchanging situation on the financial market, BSH was able to increase its revenue in North America again in 2010 and even gain market share. From here on, BSH concentrated especially on its business in the premium and luxury segment in this region.[16] The steadily rising demand in this segment translated to a growth in revenue of 26 percent in the North American region in 2015.[17]

South America

Brazil as a starting point

The company chose Brazil initially as a base for further expanding the market in South America. With a population of 160 million people at the time, Brazil was the largest and strongest growing market in Latin America in the mid-1990s with a turnover of 587 million deutschmarks in 1995.[18] Continental 2001 S/A was not only the leading home appliances manufacturer in Brazil for decades, it was also a strong brand. BHSG therefore acquired a majority share in Continental in 1994, a move that would decide the company's fate for the next 15 years.[19]

BSH used Continental as a launching pad for its Bosch and Siemens brands in South America.[20] The company exported to the most important countries on the continent – including Mexico, Peru, Paraguay, Argentina, Chile, Colombia and Bolivia.[21]

Spotlight on Cono Sur, the Southern Cone

Having acquired a majority shareholding in Continental in 1995, BSH focused increasingly on expanding its own export activities in other countries in Latin America. One promising option that came to light following examination of the different opportunities in Argentina, Chile and Peru was a cooperation with the tradition-steeped home appliances manufacturer Coldex S.A based in Peru.

Coldex had been in existence since 1964.[22] On the look-out for a successor solution, the previous owner approached BSH with an offer of a 60 percent shareholding. The manufacturer of refrigerators and gas cookers based in Lima was already being supplied for many years by Continental with components for gas cooker production. BSH acquired a 100 percent stake in Coldex S.A. in 1996.[23] The company held a 30 percent share of the cooker market in 1996/1997 and an incredible 60 percent share of the refrigerator market in Peru, but scarcely capitalized on its export opportunities. This was the starting point for BSH as it began supplying home appliances from 1997 to the Andean region, Central America and the Caribbean, something that to date had only been possible to a limited extent from Brazil.[24] BSH therefore already succeeded in the first year in exporting 30 percent of the appliances produced by Coldex.[25]

The company began marketing Bosch as a premium brand in Peru in 1999 – while the Coldex brand was aimed at consumers in the middle income bracket thanks to its attractive price/performance ratio.[26]

From Brazil to Chile

BSH sold Continental to the Mexican company Exinmex S.A. de C.V. in 2009[27], though this in no way indicated a waning of interest in South America. Coldex continued to belong to the BSH family. BSH made the decision in 2010 to become active in Chile and founded a sales organization there as a branch office of BSH Peru.[28] The Casa Bosch, as it was known, in the capital Santiago offered sales and showroom space for training and exclusive events.

Notes

  1. BSH was founded in 1967 as Bosch-Siemens Hausgeräte GmbH - BSHG for short. In 1998, the name was changed to BSH Bosch und Siemens Hausgeräte GmbH, with the short form BSH. Since the sale of the Siemens shares in BSH to Robert Bosch GmbH the company’s name is now BSH Hausgeräte GmbH, but still BSH for short.
  2. Bosch Corporate Archives, BZI06_06_D_Artikel_Umwelt, Bosch Zünder 2006/3, page 6.
  3. According to CEO Dr. Herbert Wörner. inform 1995/3, page 2.
  4. BSH Corporate Archives, A05-0020, inform 1997/3, page 4.
  5. BSH Corporate Archives, A05-0020, inform 1997/2, page 33.
  6. BSH Corporate Archives, A05-0018, inform 1995/5, page 2.
  7. BSH was founded in 1967 as Bosch-Siemens Hausgeräte GmbH - BSHG for short. In 1998, the name was changed to BSH Bosch und Siemens Hausgeräte GmbH, with the short form BSH. Since the sale of the Siemens shares in BSH to Robert Bosch GmbH the company’s name is now BSH Hausgeräte GmbH, but still BSH for short.
  8. BSH Corporate Archives, A01-0013, Business Report 1995, page 4.
  9. BSH Corporate Archives, B05-0832, Acquisition of Thermador: Project Team 7 Business Administration Kick off Meeting, 17./18.5.1999.
  10. BSH Corporate Archives, A01-0023, GB 2005, page 5; A01-0024, GB 2006, page 56. The Canadian branch of BSH Home Appliances is currently located in a suburb of Toronto, Ontario. https://www.bsh-group.de/index.php?page=1072 (last downloaded on 28.11.2016).
  11. BSH Corporate Archives, A01-0026, GB 2008, page 46.
  12. Bosch Corporate Archives, BZI06_06_D_Artikel_Umwelt, Bosch Zünder 2006/3, page 6.
  13. Bosch Corporate Archives, BZI06_06_D_Artikel_Umwelt, Bosch Zünder 2006/3, page 6.
  14. BSH Corporate Archives, A05-0025, inform 2002/1, from page 19; F-BSH-001, 40 Jahre – Eine Chronik, page 117.
  15. Bosch Corporate Archives, BZI107_06_News_BSH, Bosch Zünder 2007/1, page 6.
  16. BSH Corporate Archives, A05-0034, inform 2011/1, page 5.
  17. BSH Press Release on 12.04.2016. https://www.bsh-group.com/laender/us/index.php?showPI&y=&pm=150680
  18. BSH Corporate Archives, A05-0019, inform 1996/1, page 4.
  19. 40 Jahre BSH – Eine Chronik, Munich 2007, page 80. Continental was sold again in 2009.
  20. BSH Corporate Archives, A05-0019, inform 1996/2, page 6.
  21. BSH Corporate Archives, F-BSH-001, 40 Jahre BSH – Eine Chronik, Munich 2007, page 80.  BSH Corporate Archives, A05-0018, inform 1995/3, page 3.
  22. BSH Corporate Archives, A05-0034, inform 2011/4, page 14.
  23. BSH Corporate Archives: Folder 3 Tochtermann BSH Historie: Entwurf an die Gesellschafterdelegation der BSHG, 12.08.1996: Ausbau unseres Geschäfts in Lateinamerika, page 3, 4.
  24. BSH Corporate Archives, A05-0020, inform 1997/1, page 41.
  25. BSH Corporate Archives, A05-0021, inform 1998/1, page 40.
  26. BSH Corporate Archives, A05-0034, inform 2011/4, page 14.
  27. BSH Corporate Archives, A05-0032, inform 2009/3, September, page 11. BSH Corporate Archives, A01-0027, Business Report 2009, page 49.
  28. BSH Corporate Archives, A05-0034, inform 2011/4, page 14.