The world’s largest auto supplier Bosch has warned of a “significantly steeper” recession for the sector than during the financial crisis in one of the starkest forecasts since the start of the coronavirus outbreak.
As carmakers from Volkswagen and Daimler to Ford reported billions of dollars in lost profits from the pandemic, the German group said it expected at least a 20 per cent decrease in automotive production in 2020.
Bosch said it suffered only a 1.5 per cent drop in 2009.
The Gerlingen-based company, which closed almost 100 manufacturing sites in the wake of the coronavirus outbreak, revealed that sales had fallen 17 per cent in March, and said it was impossible to provide an outlook for the year ahead.
“A supreme effort must be made to achieve at least a balanced result,” said Stefan Asenkerschbaumer, chief financial officer.
The privately owned business also revealed that it had secured a credit line worth €3bn in the past few days, adding to balance sheet liquidity of €19bn.
Speaking to reporters, Volkmar Denner, Bosch’s chief executive, cautioned against “knee-jerk” policy reactions to the coronavirus pandemic, including a rollback of globalisation.
“Across-the-board isolationism of the kind demanded by certain populist politicians cannot be the solution,” he said, while predicting that the economic turmoil caused by prolonged lockdowns could lead to social unrest.
He said new tariffs on international trade cost the company, which ships 300m parts a day, almost €100m in 2019.
At VW, first-quarter profits fell from €3.9bn to €900m and the company predicted that annual earnings will be “severely below” last year’s profits. The world’s largest carmaker expects to book a loss in the second quarter, as the impact of shutting its plants across Europe and North America bites.
VW is also “intensely debating” payment of its annual dividend, said Frank Witter, chief financial officer.
On Wednesday, VW brand Porsche, which was the biggest earner for the group in 2020, said it would start manufacturing sports cars again at its Stuttgart and Leipzig plants, starting next week.
Ford expects a $5bn hit in the second quarter from the outbreak, as the US carmaker delayed a number of key product launches and scrapped a project between its Lincoln brand and electric start-up Rivian to develop a new battery vehicle.
The company made a $632m loss in the first three months, saying that coronavirus knocked $2bn off its earnings.
Daimler reported that net profits for the first three months of the year had fallen by more than 90 per cent to just €200m, down from €2.1bn in the same period last year.
Ola Kallenius, chief executive, warned that the Mercedes-Benz maker was expecting a “significantly more difficult” second quarter in Europe and North America.
However the company added that April “should be the worst month”, as the lifting of shutdowns began to improve the car market in May.
Mr Kallenius said Daimler’s business in China and South Korea was “more or less back to normality”.
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