The CEO of German multinational Bosch, Volkmar Denner, says that peak car production may well have been reached, and the world’s largest auto parts maker is putting €1 billion ($A1.64 billion) towards electric car, autonomous and connectivity technologies.
Recoiling from a €3 billion ($A4.93 billion) loss in earnings before interest and tax in 2019, Bosch is now making widespread changes to ensure it stays ahead of the electric vehicle game in the face of a declining fossil-fuelled vehicle industry.
Speaking at a media briefing on Tuesday (Europe time) in Stuttgart, the Bosch CEO was quoted as saying by Bloomberg, “It could well be that we passed the peak in global automotive production.”
“We are assuming that this low level will remain constant in coming years and do not anticipate any increase [before 2025]” he said.
By then, the electric vehicle sales will be on an insistent upward climb according to Bloomberg. China is expected to lead the charge with 48% of all passenger car sales in 2025 predicted to be electric.
But Bosch has reported in its 2019 results that it is seeing a decline in major markets in recent years, including China.
In Australia, a 21 month decline in petrol and diesel sales is also persisting, while electric vehicles sales have doubled over the past 12 months and market analysts saying that drivers could be waiting for more electric vehicle choice before turfing their old vehicles.
The global transition to electric mobility will see Bosch knuckle down as it overhauls its business to move away from internal combustion engine (ICE) industry to accommodate the new, clean electric vehicle industry.
Operations are already being trimmed, says Denner, and more focus is being directed towards software and connectivity.
The shift will also have a “significant impact on employment,” Denner was quoted as saying by Bloomberg.
“We need 10 associates to manufacture a diesel injection system, three for a gasoline system, and one for an electric motor,” he said.
One not-too-distant light at the end of the tunnel however could be Tesla, which is currently in a planning pipeline for a new electric car factory in Brandenburg, Berlin.
Slated for construction this year and first deliveries of electric cars in 2021, Denner says that the new factory “offers new business potential” for Bosch.