Auto slump causes Bosch profits to collapse
Bosch generates around 60 percent of its sales with mobility solutions, including control units and computer platforms for ADAS and autonomous vehicles, electrical and electronic equipment for cars, and powertrain components. Almost all cars worldwide contain Bosch products – which is why the global decline in automobile production, especially in such important markets as China and India, is having a full impact on Bosch’s results. The company anticipates that global automobile production will shrink for the third year in succession in 2020. For the current year, it expects a further decline of 2.6 percent to around 89 million vehicles worldwide – almost 10 million units fewer than in 2017. Bosch CEO Volkmar Denner does not anticipate a return to production growth until 2025 at the earliest. Perhaps things will get even worse: “It is possible that automobile production has already passed its peak,” media reports quoted the Bosch boss when presenting the figures.
Nevertheless, Denner does not want to be discouraged: Bosch is investing massively in the development of automated driving systems (cameras, radar and lidar sensors, computers) and alternative drive technologies. In research, Bosch wants to proceed in a technology-neutral manner. In contrast to automotive OEMs such as Volkswagen or BMW, who have already committed themselves to battery electric drive systems, Bosch is continuing its developments in the field of fuel cells. Since April 2019, the company has been developing such drives together with its Swedish partner Powercell; just recently, Bosch increased its stake in the technology company Ceres Power, which is also involved in the development of hydrogen technology.
From 2022 onwards, Bosch plans to start series production of fuel cells of this type, with U.S. truck manufacturer Nikola as its first strategic customer. At the same time, according to media reports, Bosch will also develop a fuel cell drive for passenger cars. In addition, the company is conducting research into the development of e-fuels – synthetic fuels that could also enable mobility that is in principle CO2-free. Bosch plans to spend 500 million euros on the development of electromobility in this case alone, with a further 600 million euros going into the development of automated driving and 100 million euros into networked mobility solutions.
Despite the increased investment in R&D, however, market observers assume that the company will not be able to avoid further job cuts. By 2019, Bosch had already cut 6800 jobs worldwide. Denner has already hinted at the prospects beyond the research labs: If the production of a diesel powertrain currently requires ten workers, only one would be needed to install a simple electric drive, he calculated.
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