Bosch auto unit misses sales target by $800 million
Supplier will reduce investments; expects 2013 growth
MUNICH -- Robert Bosch's auto division boosted global sales by 1.7 percent to a record 30.9 billion euros ($41.2 billion) last year, the company said, but missed its 2012 sales target by 600 million euros ($800 million).
The auto unit -- and Bosch as a whole -- will hold back on investments this year because of Europe's weak market, company executives said today.
Despite the troubles in Europe, Bosch's auto unit topped its previous sales record of 30.4 billion euros set in 2011 but was well short of the 31.5 billion euros forecast last autumn by auto division boss Bernd Bohr.
"We assessed the market trend a bit too optimistically during the first half of 2012," Bohr said in an interview this month with Automotive News Europe's German sister publication Automobilwoche. "We were hit hard by the weakness of south European manufacturers."
He said Bosch is a major supplier of diesel systems to those carmakers, which include Fiat, Peugeot and Citroen, so the supplier took a hit when the brands' European unit sales fell.
New-car sales in the EU and EFTA markets contracted by 8 percent last year to the lowest in almost two decades, and carmakers such as PSA/Peugeot-Citroen, Ford and General Motors have announced factory shutdowns in response.
For 2013, Bohr said he will be looking to cut everything except the auto division's r&d budget.
"We will take a close look at the head count trend in Europe, reduce the investment in equipment and facilities, and examine all the other budgets, starting with travel costs," he said.
Overall, he is "cautiously optimistic" about 2013 and expects revenue growth of 3 percent to 5 percent, with demand likely to start rising in the second half.
Troubled solar division
Bosch Group's total operating return on sales was about 2 percent last year, compared with a long-term goal of 8 percent, CEO Volkmar Denner said today at a press briefing at the company's Stuttgart headquarters. The company didn't specify earnings for the auto division or its other business units. Bosch is scheduled to report detailed 2012 figures April 18.
Group revenue, which increased 1.6 percent to 52.3 billion euros ($69.5 billion) from 51.5 billion euros in 2011, would have fallen without a boost from exchange rates, the CEO said.
"We can't be satisfied with the business year 2012," Denner said. "We're looking at fixed costs very closely, and will be restrictive regarding investments and acquisitions."
Bosch also said today that it wrote down 600 million euro in assets at its unprofitable solar-panel division, a unit whose future is being reviewed.
Group revenue in Europe fell 2 percent to 29.7 billion euros last year, Bosch said. Sales rose 9 percent to 10 billion euros in the Americas and 5 percent to 12.6 billion euros in the Asia-Pacific region.
"We expect a slightly better increase, but no strong revenue growth this year," Denner said.
For more of Bosch's financial disclosures, click here.
Bloomberg contributed to this report
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