Bosch CEO, Stefan Hartung has commented that the growth rates in the global car and the commercial vehicle market for 2023 and 2024 will be stagnant. During the IAA Transportation trade show in Hanover, Germany, Hartung said that current demand levels do not meet projections of what companies predicted five years ago. He also mentioned that owing to a slow recovery in demand, Europe especially, is expected to manufacture several million vehicles lower than earlier predicted.
Hartung reasoned these as factors like high labour and energy costs which are challenges affecting European auto makers and increased competition from cheaper Asian car makers who are gradually exporting more of their cars to Europe. He cited Volkswagen’s recent statement that it is planning for the closures of its plants in Germany for the first time, as a cost reduction measure in a bid to more competiveness with Asian companies.
In the same process of his analysis, Hartung also detected a slowdown in the growth’s rate within the electric vehicle (EV) segment. While BEV sales are higher than last year, growth rate has considerably slowed down due to shifted consumer preference for PHEVs, especially in China. “It is natural to have corrections in the market,” he said and pointed out that Bosch will still remain dedicated to electrification even if this particular segment is currently under pressure.
About the company’s employees, Hartung did not rule out additional layoffs especially given the fact that clients are also postponing orders for EV parts. In January this year Bosch outlined plans to cut approximately 3 500 positions in its home-appliance unit by 2027 and suggested that further efficiency and personnel-savings measures could be expected.
But as more global automakers readjust their electrification goals on reduced demand for BEVs owing to high costs, longer charging times, and increasing competition from Chinese manufacturers, the future of the automotive industry is rather cloudy. This may explain why Bosch has adopted electrification as its strategic product portfolio specialization given the complex global market.