just-auto.com

FRANKFURT SHOW: Bosch sees slump lasting for years

By just-auto.com editorial team | 15 September 2009

As we warn elsewhere on just-auto today, it could be easy to get carried away with the luxury, the sports supercars and the electrotechnical concepts at Frankfurt and overlook the real world. Like at Bosch where 10,000 jobs are going this year and 100,000 more staff will remain on short working hours amid an auto industry slump its top manager said could last for years.

Chief executive Franz Fehrenbach said the world's biggest automotive supplier would post a deep loss this year, with group revenue down around 15% to EUR38bn (US$55.61bn) and vehicle technology revenue down as much as a fifth.

"Never before has the Frankfurt motor show been held in such an economically difficult year," he said.

Bosch, which also makes industrial items and home appliances, will employ around 270,000 staff after the cuts. Automotive businesses headcount would fall from 168,000 to approximately 160,000.

Nonetheless Fehrenbach said he was seeing "the first signs of a recovery" and that group sales revenue was set to rise in the fourth quarter though it was unlikely to to see a quick rebound in its capacity utilisation rates, he added.

"After the low point at the beginning of this year, for 2009 we expect worldwide automobile production to fall by some 15 to 20%. But we currently see signs of recovery, and not only because of government economic stimulus packages. After all, the various cash incentives to trade in older vehicles have had the desired effect, especially in Germany. As a supplier to the industry, Bosch has also benefited from these programs, even if only to a low degree. This is because these buyer incentive programmes have stimulated demand above all for smaller cars. And these cars are not as often equipped with advanced safety systems and diesel drive technologies.

"We expect sales of the Bosch Group to fall this year by some 15%, in our automotive businesses possibly by as much as 20%.

"On the whole, it could take us until 2012 to regain the levels of 2007, the pre-recession levels. This means that for the years to come, we expect an underutilisation of our capacities to continue."