The world's biggest auto components maker Bosch warned Wednesday that "peak car production" may already lie in the past, as broader trends drag on the industry. Forecasting the third annual contraction in global vehicle output in a row for 2020, "we could already have passed peak car production," Bosch chief executive Volkmar Denner said.
The Stuttgart-based group expects 2.6 percent fewer new cars to roll off production lines this year than last, at 89 million vehicles -- down from a high of almost 100 million in 2017.
"We expect the level to hold steady in the coming years and don't expect any increase in global auto production before 2025," Denner said.
Like other German firms in the sector, including components competitor Continental, Bosch plans to press ahead with a tough restructuring after a 2019 sapped by the global growth slowdown. Falling car sales, especially in major markets China and India, undermined Bosch's profitability last year.
The unlisted group is already in talks with unions to slash more than 2,000 jobs in Germany, and shed almost 7,000 positions worldwide in 2019, bringing its total to 403,000 workers. "We can't retain structures in line with the higher demand of 2017 and 2018," Denner said.
Nevertheless, any job cuts would take place "under acceptable social conditions" especially via shorter hours or early retirement rather than layoffs, Bosch said.
The company reported Wednesday operating profit down 40 per cent year-on-year in 2019, at just under three billion euros (USD 3.3 billion), while revenues were steady at 77.9 billion euros.
Just like other parts makers and manufacturers, Bosch is pumping massive investments into electric mobility and autonomous and connected driving.
This year, it plans to up investments in electric vehicles to 500 million euros, 100 million euros more than in 2019. Setting it apart from other companies is its focus on developing hydrogen fuel cells as well as battery power.