Slowdown, pandemic cause decline in revenue and profit
The pandemic has brought the global auto industry — which was already suffering a slowdown since 2018 — to a complete standstill and the recovery will take at least four to five years, said Bosch in India on Friday.
Bosch Ltd. MD Soumitra Bhattacharya said the industry had gone back by three to four years already due to the slowdown in the economy and Covid-19 has pushed it back by another 1.5 to 2 years. “The whole industry has been affected, and we are not an exception and the recovery will take long time,” he said. Mobility currently accounts for 80% of the company’s revenues. “We are affected, short-term, with all four segments of the auto industry having seen declines. However, the long-term outlook is good and we will bounce back. We are confident of growing our share further in the mobility space,” he said.
Bosch reported a 24% decline in its mobility business in 2019-20. Its domestic sales dropped 26% and exports fell 6%. Within the mobility segment, electric powertrain solutions too dipped 30% due to the slowdown in the auto sector.
Bosch’s March-ended quarter revenues were down 18% to ₹2,236 crore while profit plunged 80% to ₹81 crore.
“The decline is due to the reduced turnover following the slowdown and the impact of the pandemic during the last few days of the quarter,” the company said.
For the full year, operating revenue was also down by 18.1% to ₹9,841 crore while profit was ₹684 crore, down from ₹1,692 crore, a year earlier.
Going forward, there would be a lot of focus on digital technology driven innovations, as per Mr. Bhattacharya. “Connected mobility is a growing segment. Battery, energy and sensors are interesting spaces. Artificial Intelligence and internet of things are the areas where we will have more focus on.’’
Bosch said it would not operate its factories at full capacity until some of recovery was established. “We will assess the market needs and operate our shifts. All non-essential expenditures are put on hold with the company preparing to push all its investments into future projects like electrification.’’
Mr. Bhattacharya further said there was no direct stimulus for the auto industry in the recently announced package by the government. “Recovery depends on some direct stimulus, relaxation in GST and clearance of te scrap policy. Money in the system can quickly revive demand in the market.”
India is the second largest research and development base for mutinational engineering and technology firm Bosch, outside of its headquarters in Gerlingen, Germany. It currently has over 31,500 employees in India, including 18,000 engineers. In 2022, Bosch would have completed 100 years of its presence in India.
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