BOSCH CUTS BACK AS THE MOTOR INDUSTRY BRAKES

GLOBAL motor vehicle production may have peaked, auto supplier Robert Bosch said yesterday, announcing job cuts and a review of its business to cope with a 44 percent drop in full-year operating profit and a downturn in demand for cars. Global vehicle production is expected to fall for the third consecutive year, by 2.6 percent to 89 million vehicles in 2020, following a drop in demand in China, Europe and the US, the Stuttgartbased car parts supplier said. “It could well be that we have passed the peak of automotive production,” Bosch chief executive Volkmar Denner said. He also said he assumed the low level would remain constant and did not expect an increase in global automotive production before 2025, while the market would shrink by 10 million units in 2020 compared with 2017. Bosch said its fullyear earnings before interest and taxes (Ebit) fell to €3 billion (R48.14bn) in 2019, a 44 percent drop from €5.4 billion in the year-earlier period and its Ebit margin contracted to 4 percent from 7 percent because of lower demand in China and India. Total revenue was stable last year, at €77.9 billion, as Bosch benefited from increased complexity in vehicles, which allowed it to sell more components. A shift to electric cars is expected to create opportunities longer term, but will impact jobs in the near term, Denner said. Ten workers are needed to make a diesel injection system, three for a gasoline system, and one to produce an electric motor, he said. I Reuters