Bosch says global auto production may have peaked, announces job cuts & lower production levels for 2020

Bosch says global auto production may have peaked, announces job cuts & lower production levels for 2020

Bosch has announced job cuts and a review of its business to cope with a 44% drop in full-year operating profit and a lower demand for cars, adding that global automotive production may have peaked. According to Automotive News Europe and Reuters, global auto production is expected to drop for the third consecutive year, by 2.6% to 89 million vehicles in 2020.

The drop is due to lower demand for cars in three key auto markets – China, the US, and Europe. Bosch CEO Volkmar Denner said: “It could well be that we have passed the peak of automotive production.” He also expects this plateau to remain constant before production level starts to increase in 2025, and the overall market would shrink by 10 million units in 2020 compared to 2017.

Bosch’s full year earnings took a hit – its earnings before interest and taxes (EBIT) fell to 3 billion euros (RM13.52 billion) in 2019, down 44% from 5.4 billion euros (RM24.34 billion) in 2018. The company’s EBIT margin also fell to 4% from 7% due to lower demand in China and India.

Total revenue, however, was stable in 2019 at 77.9 billion euros (RM351.14 billion). Bosch attributes this to the increased complexity in vehicles, which allowed the company to sell more parts and systems per vehicle produced. A shift to electric cars is expected to create opportunities in the longer term, but will impact jobs in the near term, Denner said.

Bosch says global auto production may have peaked, announces job cuts & lower production levels for 2020

He said 10 workers are required to make a diesel injection system, three for a gasoline system, and one to produce an electric motor. With that, Bosch will make staff adjustments wherever necessary, including shorter working hours, voluntary redundancy and severance packages.

The company has yet to provide a figure for global headcount reductions, though. Last year, Bosch trimmed its workforce by 6,800 employees to 402,800, with 2,000 jobs cut in Germany and 3,600 positions reduced in the Asia Pacific region.

Meanwhile, Bosch’s revenue from Mobility Services, its biggest division, was flat at 47 billion euros (RM211.85 billion). Moving forward, Bosch plans to exceed 1 billion euros (RM4.51 billion) in sales from electric car components this year, and will set aside 500 million euros (RM2.25 billion) for electromobility investments throughout the year. It will also start production of long-range LIDAR, a new sensor category, and begin production of hydrogen fuel cells in 2022.

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Matthew H Tong

An ardent believer that fun cars need not be fast and fast cars may not always be fun. Matt advocates the purity and simplicity of manually swapping cogs while coping in silence of its impending doom. Matt's not hot. Never hot.

 

Comments

  • Great excuse for their failures. Wait for Geely empayar to unleash its might onto the world. Right now its just flexing the muscles alredi Toyota and Honda is taking notice.

    P1, Geely, Mesidis, Volvo, London Taxi, Lotus > all

    Like or Dislike: Thumb up 8 Thumb down 1
    • bijan on Jan 31, 2020 at 2:25 pm

      Is anything not geely-related good to u john? just curious

      Like or Dislike: Thumb up 2 Thumb down 0
      • Calvin on Jan 31, 2020 at 4:57 pm

        Be positive in life, always see the good in everything and your life will be positive. Only bashers with negative heart will think negatively and write shit.

        Like or Dislike: Thumb up 3 Thumb down 1
      • Bashers had bash P1, Geely and China. Now they come back and jilat all the vomit they throw at them. I just enjoy telling in their faces I told u so. Alwiz think positive and where theres will they will be ways to success. HAHAHAHAHA!!

        Like or Dislike: Thumb up 2 Thumb down 0
  • vivizurianti on Jan 31, 2020 at 12:40 pm

    Syukur x 10001, that Malaysia auto production staffs are not being axed. Still can cari makan, have bini, build families, have happy-meal and have good life.

    Like or Dislike: Thumb up 0 Thumb down 0
  • seancorr (Member) on Jan 31, 2020 at 1:05 pm

    Everything is going to be automated so how is that gonna create more jobs?

    Like or Dislike: Thumb up 0 Thumb down 0
    • Veyron Owner on Jan 31, 2020 at 2:44 pm

      Many jobs to car service and repair, battery and tyre replacement, even accident claim agents.

      Like or Dislike: Thumb up 2 Thumb down 1
      • Ex VGM staff on Jan 31, 2020 at 7:37 pm

        EV has no engine oil, oil filter, spark plugs, air filter, fuel filter nor fuel pump

        Like or Dislike: Thumb up 0 Thumb down 0
 

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