When Rolf Bulander takes over as head of Robert Bosch's industry-leading parts division from Wolf-Henning Scheider in April, he will inherit a business positioned at the forefront of auto innovation.
But Bosch is a company increasingly torn between the traditional roots that made it strong and the rapidly developing demands imposed by a digital marketplace.
Privately held Bosch hasn't achieved an 8 percent operating margin, its current target, in more than a decade, but other publicly traded, more cost-driven Tier 1 suppliers such as German rival Continental are more profitable.
Continental on Jan. 12 reported that its adjusted earnings before interest and tax margin topped 11 percent last year.
In addition, emerging competitors such as Germany's ZF Friedrichshafen, which is taking over TRW Automotive, a driver-assistance and safety specialist, appear poised to chip away at Bosch's revenue lead.
Bosch has realized it must adapt its manufacturing-heavy business model to provide more mobility solutions and services. This, however, is a transition that Bosch managers acknowledge will see it encroach further into the territory of its customers, the automakers.