Bosch increases sales to 91.6 billion euros in fiscal 2023 The company plans to start around 30 production projects related to electric vehicles this year

Reporter Fang Chao and Quartz Jing report from Shanghai

"We live in a challenging environment, both from a social and ecological point of view. In this context, we will only be able to continue to operate in the interests of all stakeholders if we maintain the steady development of Bosch's business. Thankfully, we have performed better than expected in 2023. Dr. Stefan Hartung, Chairman of the Board of Management of Bosch AG, said at the Bosch Group's annual press conference recently.

The reporter of "China Business Daily" learned from the Bosch Group that the Bosch Group's business will achieve contrarian growth in fiscal 2023, of which sales will reach 91.6 billion euros, and the EBIT margin will increase by 5.3% year-on-year, while according to the Bosch Group's plan, its sales in 2024 are expected to increase by 5% to 7%, and the EBIT margin will ideally be the same as last year.

"In fiscal 2023, Bosch achieved its business goals and further strengthened its market position in various business areas such as semiconductors and building intelligent systems. Despite the unfavorable economic situation, Bosch continues to invest in innovation, collaborations, and mergers and acquisitions to ensure growth during the transition period. Stefan Hartung said.

Taking the field of intelligent mobility as an example, the Bosch Group carried out the largest restructuring and adjustment in the history of the group at the beginning of this year around the transformation of the automotive industry, and established the Bosch intelligent mobility business. ”

We will continue to increase smart mobility and hydrogen energy

"Thanks to a sprint to the end of 2023, EBIT was slightly higher than we expected when we announced our preliminary earnings in early February. In nominal terms, the Bosch Group's sales increased by 3.8 percent to 91.6 billion euros in 2023. Dr. Markus Forschner, Member of the Board of Management and Chief Financial Officer of the Bosch Group, said at the press conference.

In fiscal 2023, the Smart Mobility business remains the core pillar of the Bosch Group, with sales of 56.2 billion euros, up 6.9 percent, adjusted for currency effects of 10.9 percent, and an EBIT margin of 4.4 percent (2022: 3.4 percent).

In addition, in fiscal 2023, Bosch Industrial Technology sales increased by 6.8 percent to EUR 7.4 billion, or 10.2 percent after adjusting for currency effects, while sales in Consumer Products decreased by 6.6 percent from the previous fiscal year to EUR 19.9 billion, a slight decrease of 1.2 percent after adjusting for currency effects, and Energy & Building Technology sales increased by 10.5 percent to EUR 7.7 billion, or 13.2 percent after adjusting for currency effects.

Markus Forschner also said: "In 2023, we have been able to increase our profitability and financial strength. EBIT rose to around 4.8 billion euros from 3.8 billion euros in the previous year. The EBIT margin increased from 4.3 percent to 5.3 percent. Although there are still some gaps, we are on track to reach our margin target of at least 7%. We plan to achieve this goal by 2026. ”

The reporter noted that the Bosch Group is working hard to achieve the goals of sales and profit margins, and Steven Hartung revealed: "First of all, achieve an average annual growth of 6% to 8% and achieve a profit margin of at least 7%. Second, it ranks among the top three leading suppliers in key markets in all regions of the world. ”

"Bosch plans to achieve this in the coming years, as we are undergoing transformation in all areas of our business. This is not only a major challenge for Bosch, but also creates a wide range of growth opportunities. Whether it's electrification or automation, software or artificial intelligence, Bosch has deep know-how and know-how. Stephen Hartung emphasized.

"Bosch expects that by 2030, up to 70 percent of new car sales in Europe will be electric. In China and North America, the proportion is expected to be between 40% and 50%. In addition, for China and North America, we expect high-performance hybrids to account for a significant market share by 2030 – one in five in North America and up to one-third in China. ”

"For long-haul heavy-duty commercial vehicles, there is still a demand for solutions such as plug-in hybrids and range extensions. Electric motors and combustion engines will continue to coexist for some time to come, which also creates opportunities for Bosch. Stefan Hartung said.

In addition, in the field of hydrogen energy, the Bosch Group's sales of hydrogen technology are expected to reach 5 billion euros by 2030. Stefan Hartung said: "Still, the situation in each market is different and dynamic. In 2023, Bosch has already started production of hydrogen modules in Stuttgart, Germany, and Chongqing, China. China is expected to be the first market in this area, while European or North American markets are expected to show significant growth through the next decade. ”

In the past ten years, more than 50 billion yuan has been invested in China

Behind the growth of the Bosch Group in fiscal 2023, its development in Europe, China and other global regions has also attracted attention from the outside world.

According to data provided by the Bosch Group, Bosch generated sales in Europe of €46.8 billion in fiscal 2023, up 5.5 percent from the previous fiscal year and 7.9 percent after adjusting for currency effects. Sales in North America increased by 6.2 percent to 15.2 billion euros, or 8 percent after adjusting for currency effects. Sales in South America amounted to EUR 1.7 billion, compared to EUR 1.8 billion in the previous fiscal year, with a decrease of 6.2 percent converted into an increase of 1.8 percent after adjusting for currency effects.

In the Asia-Pacific region and beyond, Bosch generated sales of €27.9 billion in fiscal 2023. This represents a slight increase of 0.6 per cent, or a significant increase of 8.6 per cent after adjusting for exchange rate effects. Among them, the Bosch Group's sales in the Chinese market reached 139 billion yuan (about 18.2 billion euros), a year-on-year increase of 5.2%.

"Among them, automobile-related accounted for about 80%, 112.1 billion yuan, an increase of 8.2%. The non-automotive sector, as our infrastructure and real estate sectors, were affected by the general trend. Dr. Xu Daquan, President of Bosch China, recently said that the Chinese market accounts for about 20% of the Bosch Group's sales.

Behind the steady growth of the performance is a reflection of the continuous increase in investment in the Chinese market.

"We continue to increase our investment in China, and we have invested about more than 50 billion yuan in the past ten years, with an average of 5 billion yuan per year. Last year, we invested 7 billion yuan in Suzhou to expand the production base of new energy and smart car related parts. The first phase of this project will be completed in the second half of this year, and the production line will be put into use at that time. Xu Daquan revealed.

Xu Daquan also introduced: "Yantai Bosch Huayu has invested 700 million yuan to add 9 production lines related to the steering of new energy vehicles. At the same time, the Chongqing hydrogen fuel cell base was put into use in November last year, German Chancellor Olaf Scholz just went to it in April this year, and Premier Li Qiang also went to it in December last year, and this factory suddenly became a global 'super star'. ”

According to data provided by the Bosch Group, by the end of 2023, Bosch had 34 production sites and 26 technical centers in China, with nearly 58,000 employees. China is the market where Bosch has the largest number of employees outside of Germany, including more than 10,000 R&D personnel. In 2023 alone, Bosch will spend 11 billion yuan (about 1.4 billion euros) on R&D in China.

"For more than a decade, our slogan has been Local for Local. There is a R&D team in China, but products based on the German platform are applied and customized in China. In the last two or three years, we have called certain product areas Local for Global, because Chinese OEMs are at the forefront. For example, the intelligent cockpit system is completely developed in China, which surpasses Germany in terms of the volume of customer projects and the speed of research and development. Xu Daquan said.

"The situation has been evolving, but I think it's thanks to the Chinese car market, which gives us this momentum and has to do it in China. In the consumer goods industry, Chinese brands are also very advanced in many fields, especially intelligence, or the use of screen interconnection, China has done a good job, which also prompts us to increase the speed of research and development in this area. Xu Daquan said.

Nevertheless, the current price war in China's new energy vehicle market is intensifying, how will the Bosch Group, as a giant supplier of auto parts, respond?

Xu Daquan said bluntly: "From Bosch's point of view, the price reduction requirements are too high, or someone can supply at a lower price, maybe we have to lose some of our volume." From Bosch's point of view, we need to balance market share with sales revenue and profit. ”

"But we don't know if we lose money and get a share, because we want to keep a virtuous cycle, keep investing in new technology areas, and keep going, that's our idea. Xu Daquan emphasized.

(Editor: Quartz Jing Review: Tong Haihua Proofreader: Yan Jingning)