Volatile global economy pushes headquarters to learn from Latin American leadership
05/09/2025
Last year, several countries began facing inflation, high interest rates, and abrupt changes to their economic environment—conditions they were not used to. In response, Bosch’s global leadership invited the executive heading Latin American operations to Germany to explain how to navigate a region accustomed to volatility.
“When things started getting rough, they said, ‘Come tell us how you do business in Latin America,’” said Argentine Gastón Diaz Pérez, who has led Bosch in the region since 2022.
Mr. Peréz titled his presentation “Driving in the Fog.” It opened with a car approaching Copacabana, complete with palm trees, the beach, and Brazilian music. A click later, thick fog set in, blinding the road ahead. The car’s headlights turned on, revealing just a few meters of visibility. “Doing business in Brazil, you can’t see the long term,” he said. And in Argentina? “That would be the extreme—driving with the lights off,” he added. “The Germans loved it,” he recalled.
“We’re used to making decisions in volatile environments. That’s an advantage we have over the rest of the world, which is now uncomfortable,” said Mr. Peréz, pointing to U.S. trade policy as an example. “I think the world has shifted into Latin American mode.”
From Bosch’s perspective, this shift could play in the region’s favor. The world’s largest automotive parts maker has not only learned from the region’s economic instability but has also begun to recognize the potential of its Brazilian subsidiary, which combines technical expertise, a concentration of talent, and competitive advantages—enabling reduced reliance on the headquarters.
Bet on electric engines
One of the latest developments in talks between Bosch Brasil and global leadership is the potential production of electric motors for vehicles. If approved, the German multinational would begin manufacturing electric or hybrid engines in either Campinas (São Paulo) or Curitiba (Paraná), where its factories are located. The experience would start with heavy vehicles, Mr. Peréz said. These plans are under evaluation, he noted.
Further along is the plan to localize production of the ESP (Electronic Stability Program), a system that controls vehicle traction. Bosch has been manufacturing the mechanical component of this system in Brazil for about a decade. By the end of this year, it will begin producing the electronic component as well, which is currently imported from Mexico and Asia.
“This is a highly sophisticated computer. If a truck suddenly appears in front of you, the ESP system brakes and lets you swerve. You think you’re a great driver, but it’s the system that managed everything,” Mr. Peréz said. “Imagine the sensor data processing speed required to make a decision at 100 kilometers per hour.”
Latin America growth
The localization of parts and new projects have helped drive Bosch’s growth in Latin America. While results were less favorable in key global markets, the company’s revenue in the region rose 12% in 2024 to R$10.8 billion. Brazil accounted for 77% of that, or R$8.4 billion, with exports making up 21% of the total.
Mr. Peréz said the strong result stems from both improved competitiveness and growth in the automotive market, Bosch’s main business segment in the region.
“Cars are becoming more and more high-tech. That helps a company like ours, because we sell technology to the auto industry,” he said. Mr. Peréz expects continued growth as hybrid vehicle production increases—especially flex-fuel hybrids that can run on ethanol. “All automakers have announced they’ll launch one or more flex hybrid models in the coming years, and we’re happy about that.”
Mr. Peréz said the headquarters sees Latin America as a region that “grows below its potential.” “We all feel that Brazil’s GDP could be growing 6% or 7%, right? The region is far from global conflicts, geopolitically neutral, and still has a young population and many of the resources the world will need in the coming years,” he said.
Agribusiness potential
Food production is one of those key resources, Mr. Peréz noted. That’s why Bosch has been investing in agribusiness technology. In February, Brazil was selected as the group’s global research and development center for agriculture. “Our clients are here,” he said. The plan includes a R$200 million investment and the hiring of 100 professionals, including several who were previously working abroad.
Mr. Peréz underscored Brazil’s role in boosting global food output. “Besides favorable weather and abundant fresh water, we have three harvests a year. Latin America will be the world’s top food exporter in the coming years.”
As an example of new agricultural technologies, Mr. Peréz highlighted an intelligent sprayer developed using artificial intelligence. The system can distinguish between weeds and soybean plants, spraying herbicide only where needed—even at speeds of 20 kilometers per hour.
“Are we going to keep just producing grains and importing technology from others? Or are we going to take on the challenge of being both top producers and the place where the best technology is developed to make it all happen?” he asked.
*By Marli Olmos — São Paulo
Source: Valor International
https://valorinternational.globo.com