According to Reuters, Stefan Hartung, CEO of German automotive parts supplier Bosch, stated that growth in the global automotive and commercial vehicle market is expected to be very slow this year and next.
Speaking at the IAA Transportation Trade Fair in Hannover, Germany, Hartung noted that current global demand for vehicles is lower than the automotive industry's expectations from five years ago. The number of vehicles produced in Europe is expected to fall short by several million compared to earlier projections. He also added that it will take several years for the market to return to previous levels of vehicle demand.
Hartung further mentioned that growth in the global electric vehicle (EV) market is also expected to slow, although sales of fully electric vehicles are still increasing compared to last year, driven by consumer interest in plug-in hybrid vehicles, including in China.
He emphasized that Bosch will continue with its electrification strategy, as market adjustments are normal. However, he reiterated that if customers delay orders for electric vehicle components, Bosch factories, including large plants, may face further layoffs.
In February this year, Bosch announced plans to cut about 3,500 jobs in its home appliances division by 2027. In April, Bosch further warned of additional cost-cutting measures and potential job cuts.
Global automakers are scaling back their electrification goals due to weakening demand for fully electric vehicles, driven by the lack of affordable models, slow deployment of charging infrastructure, escalating trade tensions, and increased competition from Chinese rivals.
European automakers are facing high labor and energy costs, as well as intensified competition from low-cost models produced by Asian competitors, who are shipping more vehicles to Europe.
Earlier this month, Volkswagen, Europe's top-selling automaker, announced that it is considering shutting down some of its factories in Germany to cut costs and compete with Asian rivals.
