Following what the supplier described as “a mediocre fiscal year 2019”, the COVID-19 crisis has led to a “significant decline in turnover and earnings” at Brose.
It has now forecast turnover of EUR4.4bn euros for 2020, a 25% fall from the previous year.
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Hence the family-owned company is accelerating implementation of its Future Brose renewal programme which CEO Ulrich Schrickel presented at a shareholder and advisory board meeting in Bamberg.
Production stops at car manufacturers have led to a major drop in orders though, in China, the company is seeing the market recover quickly after restarting operations.
In Europe, however, Brose, said, “there is a great reluctance to buy new cars”.
“And in North America, call-off orders have fluctuated due to frictions between the US and Mexico.”
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By GlobalDataBrose does not expect worldwide production volume to reach 2019 levels again for another two to three years, with a corresponding impact on financial results.
The supplier of mechatronic door and seat systems said it was “confronting these challenges with a systematic cost management program while still investing strategically in future projects”.
“Our family owned company has a good financial basis and the full support of the owners. Our aim this year is to ‘break even’ and continue to maintain the financial independence of our company over the long term. We are rigorously implementing measures to safeguard earnings and will return Brose to profitability,” added Schrickel.
Brose immediately responded to the collapse in the automotive market with short time work or company holidays at all levels.
The Future Brose renewal program objective is to improve competitiveness, increase the power to innovate and achieve growth.
Brose is building a new location for the drives business division in Serbia and investing in electronics and software.
“We will continue to cut red tape, flatten hierarchies and increase the efficiency of collaboration. The Future Brose program will also lead to adjustments to the number of employees in Germany, which is necessary in order to secure long term competitiveness and take advantage of opportunities for the future,” said Schrickel.
The company remains committed to its long term strategy and is expanding mechatronics by adding sensor technology and software to the mix.
“Our product portfolio opens up new forms of mobility – with flexible vehicle interiors, e-bike systems or drives and controls for electric scooters. Our intelligent and connected products for vehicle access and interior let drivers experience a whole new level of comfort,” Schrickel claimed.
Brose has received its first series production order for radar technology.
Further development of the system for hands free opening and closing of liftgates is seen an important step at the supplier as technology transitions from capacitive to radar sensors.
Brose is applying this to other products such as collision detection in tailgates and vehicle doors or for monitoring the interior for the protection of passengers.
