Bosch's CFO Speaks: Anticipated Vehicle Production Growth Hangs in the balance at 1%
jh Gerlingen
Auto manufacturers anticipate a challenging year ahead in 2025.
Page 8 Interview
Pessimistic forecasts greet the automotive industry in the coming year. "In our projections, we anticipate global vehicle production growth to reach a maximum of 1 percent," says Markus Forschner, Bosch's Chief Financial Officer, in a CFO interview. "And by 2024, we project ourselves to be approximately 4 percent lower than the previous year."
The outlook for Europe takes a downturn, according to Forschner: "We expect another arduous and economically challenged year for Europe." On the other hand, China's relaxed monetary and fiscal policies could offer a push, and the US Federal Reserve's interest rate reductions may also lend a helping hand.
Threatening tens of thousands of jobs
Automotive suppliers not only wrestle with dwindling demand but also with a slower evolution in vehicle technology than anticipated. At Bosch, this primarily impacts automated driving and electromobility. "We had envisioned substantially higher volumes for both," Forschner confesses. "And we do not foresee a significant escalation in demand in the next year or two."
The automotive industry, as per credit insurer Atradius, heads the list of sectors with the highest insolvency risk in Germany. The number of businesses going under is anticipated to persist into 2025. The titans of the industry, excluding Bosch, consist of ZF, Continental, and Schaeffler, who have announced the shedding of tens of thousands of jobs. Bosch alone stands to lose around 13,000 positions, with roughly 8,600 in the Mobility segment. When prompted about the prospect of additional job cuts, Forschner replies: "We cannot rule out further adjustments."
But it's not all doom and gloom, Markus Forschner reveals. Bosch has set a target to organically grow sales revenue by 1–3 percent in 2025, despite prevailing market weaknesses. This goal is predicated upon the successful completion of planned acquisitions by mid-2025. If these acquisitions materialize as intended, Bosch expects growth in the higher range of the projected 1 to 2 percentage points[4]. The company is also investing heavily in technology and electromobility for long-term growth, aiming to expand in key markets like North America and India[1][4].
"Bosch, while anticipating a minimal 1% growth in global vehicle production, aims to organically grow sales revenue by 1-3% in 2025, despite market weaknesses. This growth is contingent on the successful completion of planned acquisitions by mid-2025."
"In the finance sector, the automotive industry, led by Bosch, heads the list of sectors with the highest insolvency risk in Germany, with tens of thousands of jobs at risk due to market slowdown and slower evolution in vehicle technology."
