After being hit hard by stagnation of demand linked to the continent’s debt crisis, Bosch is now battling to avoid cutting jobs at its European plants.
In spite of recent growth in emerging markets, Europe still accounts for 57 % of sales and forecasts expect revenues this year to remain below the level achieved in 2007. Factoring in annual improvements in productivity, Bosch is sitting on an excess of capacity.
Bosch is also trying to find a buyer for its solar unit, which has incurred about €2.4bn in losses since it entered the business in 2008. Volkmar Denner, head of the German group, said Bosch was “on course” to reach its 2013 goals, which include a target to increase revenues by 2-4 % this year compared with a total of €52.5 billion in 2012.
“I think we have reached the bottom [in the European car market] and there will be some improvement but I do not rely on having a strong growth,” he said.
He declined to specify a number of job cuts and said Bosch would first focus on creative ways to improve the competitiveness of its European units, for example by selling new products and expanding sales in emerging markets.
The company remains a long way from its medium-term goal of achieving an 8 % return on sales. Last year, earnings before interest and taxation were just 2.5 % of sales.
Via Financial Times