BENGALURU: Auto components maker Bosch warned that a turnaround of the Indian automobile industry has been pushed back by about 4-6 years due to Covid-19 which started at a time when the sector was already grappling with a year-long slowdown due to a weak economy.“2018-19 was a record with heavy commercial vehicles sales at about 5 lakhs, passenger cars at 2 million and two-wheelers at 25 million. This fiscal those numbers are expected to be 2 lakh, 1 million and 12 million respectively which is the level of 2010. We had gone back by four years already due to the slowdown in the economy and this crisis has pushed us back by another 2 years,” Bosch Ltd managing director Soumitra Bhattacharya told TOI.
Due to the severe slowdown in demand from OEMs and a subsequent trickle-down effect on its suppliers, the German conglomerate expects the Indian automotive industry to fall by 30% this fiscal. “As a leading automotive technology company with 80% of our revenues driven through mobility business, we have been affected severely,” the company said on Friday.
As demand flounders, Bosch will also not operate its factories at full capacity, will assess needs of customers and is open to block closures if it feels demand is not enough to sustain shifts. All non-essential expenditures are put on hold with the company preparing to push all its investments into future projects like electrification.
For the fourth quarter ended March 31, revenue from operations was down 18% to Rs 2,236 crore while profit plunged 80% to Rs 81 crore. The decline is due to the reduced turnover following the market slowdown and the impact of the coronavirus pandemic during the last few days of the quarter. For the full year, operating revenue was down by similar numbers to Rs 9,841 crore while profit was Rs 684 crore, down from Rs 1,692 crore, a year earlier.
Bosch’s mobility business sector declined by 24% in 2019-20, due to slowdown in the auto segment. Domestic sales declined by 26% and export sales declined by 6%. Within the mobility segment, the Powertrain Solutions business declined 30% due to a low performing automotive market. Business beyond mobility solutions declined 14%.
Total investments last fiscal was Rs 399 crores with major spend on expansion of the Bidadi plant and Adugodi campus. “A quicker recovery now depends on government stimulus, money in the system and how fast demand can be revived,” said Bhattacharya.