Layoffs and transformation are undoubtedly the main theme of the global auto parts industry in 2024, especially for traditional tier1 giants. The Chinese market is undoubtedly the top priority.
This week, following Bosch, Continental, ZF,Forvia, one of the world's top 10 auto parts companies, announced that it will lay off about 13% of its European workforce over the next five years, with a total of nearly 10,000 employeesand accelerate the transformation of electrified and intelligent businesses.
Data shows that by the end of last year, the company's global workforce reached 1570,000; In 2023, revenue increased by 14% year-on-year to 2724.8 billion euros, however, this is almost 50 percentage points lower than the growth rate of the previous year (the acquisition of Hella was completed in 2022).
At the same time, HELLA's synergies and market share growth in China are the main factors. Currently, seating, CLARION automotive electronics and automotive lighting are the company's main businesses.
Patrick Koller, the company's chief executive, said that in addition to the layoffs, there are adjustments to production and R&D spending, with the goal of improving profit margins, especially from Chinese competitors. More than 45% of the company's EBIT comes from Asia, particularly the Chinese market, according to the data.
According to the plan, Forvia aims to save around 500 million euros (about 5. ) per year by 2028$3.9 billion), thus increasing profit margins from 2 last year5% to more than 7%.
This includes a 50% reduction in R&D spending"It's going to take a lot of restructuring, but the bottom line is that if you don't, in three to five years, you're out. Patrick Koller said.
In the view of the Gaogong Intelligent Vehicle Research Institute, the entire auto parts industry has entered a very critical integration and elimination cycle. These include the centralization of electronic architecture, the introduction of more AI capabilities, all-round competition in the Chinese market, the flattening of the ** chain, and geopolitical uncertainty.
The trend of the industry in 2024 also affects the nerves of practitioners. Judging from the layoffs of several giants in this round, they are basically in overseas headquarters and traditional product lines, and their determination to continue to invest in the Chinese market is still the same.
Earlier this month, global auto parts giant Bosch once again warned that the newly formed Smart Mobility division (the restructuring of the former automotive business) could continue to lay off workers and postpone the target profit margin of 7% for one to two years, due to the company's economic environment in 2024 will become bad.
As of January 1, 2024, the Bosch Automotive & Intelligent Transportation Technology business will be officially renamed "Bosch Intelligent Mobility Group" after the reorganization, which is a major structural adjustment, integrating the businesses of electric drive, automotive electronics, intelligent vehicle motion control, intelligent driving, etc., and operating independently under the group model.
According to preliminary figures, Bosch's currency-adjusted sales in 2023 increased by 8 percent to 91.6 billion euros (about 98.5 billion).$600 million), with an operating EBIT margin of 5%.
And in January, a Bosch spokesperson said it planned to cut 1,200 jobs in its software development division by the end of 2026 due to slower-than-expected growth in autonomous driving.
Behind this, the Chinese market is also a key target for Bosch (the automotive business accounts for nearly 25% of revenue). The progress of China's parts enterprises is an indisputable fact.
For example, Bosch strong products such as ABS and ESP had basically no competitors in China in the past. But now it is not what it used to be, and a number of highly competitive Chinese businessmen have emerged on the chassis track.
In addition, FORVIA's Hella was once the leading player in millimeter-wave radar in the Chinese market. However, in the past few years, with the rapid rise of local manufacturers such as Senstech, Desay SV, Airtek, and HASCO, the pattern of the radar market has changed from what it used to be.
China's auto market is very important, there are many innovative products, and the innovation time is very short, and many products and technologies have appeared in 2 years. "Especially in the intelligent driving track, including new power car companies and Chinese first-class companies have overtaken Bosch in the NOA market.
However, Bosch is still investing in China.
A year ago (early January 2023), Bosch announced an investment of about 7 billion yuan (about 1 billion US dollars) to set up a R&D and manufacturing base for core components of new energy vehicles and autonomous driving in Suzhou.
At the same time, Bosch Huayu Yantai Phase IV project will also be put into operation in the second half of 2023, with an investment of 700 million yuan, and plans to add nine new production lines to produce electric power steering systems.
According to the Chairman of the Board of Directors of the Bosch Group, China is the largest single market for the Group, and it is necessary to make full use of China's local R&D and production capacity to further enhance the company's global competitiveness.
ZF plans to cut around 120,000 people, however, most of the layoffs were at the headquarters in Germany. For the company, the Chinese market is still the world's largest automotive market, so its determination to cultivate the Chinese market has not changed.
According to the company, China is the main driver of business growth in the Asia-Pacific region, which has experienced a historic leap from "sales in China" and "manufacturing in China" to "research and development in China". Among them, the 800-volt silicon carbide electric drive has achieved the world's first mass production in China.
In August last year, ZF's first R&D center in South China, ZF Guangzhou Technology Center, was officially opened, and ZF's second automotive electronics plant in China, ZF Guangzhou Electronics Factory, was officially opened.
According to the plan, ZF's Guangzhou Technical Center will focus on core competencies such as software development, mechatronics design, and system integration, and provide local customers with comprehensive technical solutions for ZF, such as active safety systems, passive safety systems, autonomous driving, electric drive systems and other technologies.
At the same time, after the completion of the Guangzhou electronics factory, it will also cover four product lines: advanced driver assistance systems, high-performance domain control, safety electronics and chassis control, so as to accelerate the transformation of electrification and intelligence.
At the same time as the transformation is accelerating, ZF is also restructuring its internal business, including traditional passive safety businesses such as ** airbags. Currently, the size of the staff in the above business is about 350,000 people.
In addition, Forvia's China automotive electronics industry chain project in Fengcheng (covering cockpit domain controller, display technology and cockpit monitoring system, as well as hardware and related software products such as driving assistance) was also completed and put into operation in November last year, and the output value is expected to exceed 7 billion yuan in 2027.
Continental, which announced layoffs of more than 7,000 people, also hopes to improve R&D efficiency while reducing R&D spending. "In the coming years, products will be developed in a completely different way than before, with flexibility and speed being key metrics. The market changes so fast, we need to be flexible. ”
In fact, in addition to layoffs, Continental is also actively promoting the divestiture of assets. Last year, the company's electrification subsidiary, Vitesco Technologies, was acquired by Schaeffler with a 36€400 million acquisition.
In addition, the Supervisory Board of Continental is also preparing to spin off the automotive business of Contitech, a subsidiary of the ** group, mainly involving rubber and pipe parts business for fuel vehicles.
In the company's view, in the context of car companies, especially the head new forces, continuing to lead the way in intelligence, the first business must adjust its product portfolio more frequently than before to keep up with the rapid pace of change in the industry.
Last year, the company further deepened the localization strategy of "taking root in the market and serving the market", which became the company's new strategy in the Chinese market. Including, expanding the layout of local production; Strengthen local R&D teams and actively embrace local ecological cooperation.
For example, last year, Continental signed a strategic cooperation agreement with Leapmotor Technology, which will not only be equipped with advanced products and technologies such as Continental's braking system, passive safety sensors and integrated safety solutions, but also strengthen strategic cooperation in intelligent foundry services.
In addition, the company's first cross-domain vehicle control high-performance computing unit in the Chinese market was developed by a local R&D team in China. "By 2024, Continental's high-performance computing units will be installed in more than 30 different vehicle models from several automakers. In China, we got two local orders. ”
Among them, last year, on GAC Aion's Xingling architecture, Continental Group first delivered the first computing platform (Nxp-based S32 G3) to realize the implementation of cross-domain computing architecture.
StillThe aggressiveness of the Chinese market in intelligence has also brought new risks. Especially in 2024, the first battle of car companies started in an instant.
According to the data, from January to November 2023, at present, the penetration rate of new energy below 100,000 yuan and in the range of 25-400,000 yuan has exceeded 40%, and the market competition will gradually shift to two ranges of 10-250,000 yuan and more than 400,000 yuan.
Among them, the price of 10-250,000 yuan for parts, especially intelligent software and hardware, further increases the cost pressure of the first chain. In particular, the strength of China's own brands in the new energy market has made foreign parts manufacturers and Chinese local manufacturers form a frontal fighting situation.
For Mobileye, the Chinese market is the most important, and our high-end products will enter China first and then go to other markets. This was the judgment of Mobileye President and CEO Amnon Shashua during his visit to China last year.
For example, taking the traditionally strong chassis systems of giants such as Bosch, Continental, and ZF as examples, in the past few years, China's local leading manufacturers have grabbed a lot of share in the ESP, steering and braking fields.
Among them, Tongyu Automobile has provided more than 100 models for more than 80 well-known customers, and has the strength to compete with foreign counterparts in the control track; At the same time, the company has two production bases in Jiading, Shanghai and Yichun, Jiangxi, and has built an intelligent manufacturing center with an annual production capacity of 1.5 million sets.
According to data released by the Gaogong Intelligent Vehicle Research Institute, from January to November 2023, the installation rate of standard wire-controlled braking systems (including two one boxes) for passenger cars in the Chinese market (excluding imports and exports) is 3840%；The year-on-year growth rate of carrying volume exceeded 50%, and it is worth mentioning that the proportion of localization has exceeded 25%.
Behind these new entrants is the full support of several local Chinese car companies, and domestic independent and controllable has become a new fashion. Taking Tongyu Automobile as an example, shareholders include Xiaomi, Dongfeng, BAIC, JAC, Xiaopeng, etc.
In order to maintain their market share, ZF and Bosch have accelerated the launch of integrated vehicle motion control systems, and based on the software and hard junction coupling mode, they adapt to the hardware of different manufacturers.
For example, the Bosch local team has developed a new vehicle motion control system, which fully covers the software and system solutions for vehicle freedom motion management, and coordinates all vehicle motion actuators such as braking, steering, power and suspension.
An open architecture that supports the integration of third-party actuators is one of the cores. As we all know, Bosch has been the leading market share in ESP, EPS and brake-by-wire (two box, one box) market segments for many years.
Behind the fierce competition is the strong performance of the Chinese market and Chinese car companies.
According to the data, China's automobile production and sales will reach 3016 in 202310,000 and 300940,000 units, up 11. y/y6% and 12%, reaching record highs and achieving double-digit growth, ranking first in the world for 15 consecutive years.
China is not only an important market for the Bosch Group, but also an innovation and R&D base. Earlier this year, the company said it would continue to invest in China to enhance its manufacturing and R&D capabilities.
**Originated from the Internet, not for any commercial use, if there is any infringement, please contact to delete. The content is for reading purposes only and does not constitute investment advice, so please treat it with caution. Investors act accordingly at their own risk.