Automotive News - October 20, 2008 - (Page 16B) 16B • OCTOBER 20, 2008 At Bosch, r&d spending remains strong A cooling global economy and rising raw materials costs are just two of the concerns facing auto supply giant Robert Bosch GmbH. But even as Bosch scales back profit expectations, it plans major investments in r&d. Bosch CEO Franz Fehrenbach explained why recently in an interview with Automobilwoche Editor Guido Reinking and Staff Reporter Matthias Krust at the company’s Stuttgart headquarters. Automobilwoche, like Automotive News, is published by Crain Communications Inc. How badly does this financial crisis threaten the world economy? The hope that this financial crisis questionanswer Bosch CEO Franz Fehrenbach: “The really difficult year will be 2009 because many cost increases will have their full impact by then.” can be limited to a single region or sector has been shattered. It has long spilled over into the real goods economy. In the U.S., Bosch is not only feeling weak demand in the vehicle business but also in consumer goods. And Europe has now been affected. Bosch recently lowered its growth forecast because of the crisis. This year, the Bosch group will not achieve the 5 percent revenue growth that we projected last April. Despite everything, though, we will, in fact, grow this year. In the first half of the year, we were able to more than offset the weakness in the U.S. with strong growth in developing countries. But a clear slowdown has hit markets such as China and India. Also, the previously stable demand in Europe has started to fracture. “DOWN-SIZING” OR “RIGHT-SIZING”? ACCORDING TO NEW STUDY, CAR BUYERS SAY “BOTH.” Acxiom’s Automotive Consumer Dynamics study helps marketers pinpoint target buyers. For a complimentary subscription, visit www.acxiom.com today. What does that mean for profits? This year, due to the steep rise in raw material and energy prices, we will miss our targeted pretax profit margin of 7 to 8 percent. Profits in vehicle technology will be weaker than the 1.6 billion euros ($2.36 billion) last year. But the really difficult year will be 2009 because many cost increases will have their full impact by then and marginal income will be lacking due to reduced revenue growth. Bosch hasn’t hit that pretax return target for years. Can it be achieved? Last year, we were just under 6 percent. But we have to look at the shortfall in our target return against the background that the industry is in a particular phase. As the leading auto supplier, we want to and will develop a variety of solutions for powertrains. Our research and development expenditure is correspondingly high. In 2007 it was 10.2 percent of revenue, and we won’t reduce it this year either. Innovations are the No. 1 success factor for Bosch. That’s the reason we put up with a loss of 1 to 2 percentage points in our return rather than cut development spending. How do you plan to get high raw material prices under control? Raw material prices are leading to an additional cost burden in the high three-figure millions. You can’t offset something of that magnitude with productivity increases or other measures. So we will reach a point where we will have to undertake earnest negotiations with customers and suppliers on costs. We have to arrive at a fair division of costs. The solution in 2007, when we distributed the burden in thirds among the manufacturer, suppliers and us, no longer is sufficient because energy and logistics cost increases have been added. How bad are your losses in the U.S.? The crisis involving the Detroit 3, which have been among our largest customers for years, has naturally hit us hard. So we’ll have losses in 2008. But there is no question whatsoever of withdrawing from the U.S. We are talking about the largest single market in the world, with about 14 million new vehicles this year. The market probably won’t be any better in 2009. With the rapid expansion of hybrid and pure-electric vehicles, do we still need fuel cells? We have long monitored fuel-cell development and have decided to get into component development. We primarily see opportunities in developing countries that still do not have an infrastructure. The Chinese are thinking hard about this direction. Megacities will be on the drawing board there in coming decades. If they consider a hydrogen infrastructure for fuel cells as a stationary energy supply and in vehicles from the start, this can be a paying proposition economically. What components do you want to manufacture? We certainly won’t manufacture fuel cells. We’ll focus on everything that is needed for the control of the system. We cannot say yet when we will be ready for series production. c pla nt ion for yours. Kno ocat xvil al l leOa ide e kR h st id i ge I essee. enn y, T lle Va ion at ov nn Just ov er W’s rom V mf 0k 10 ne w www.InnovationValleyInc.org/automotive http://www.acxiom.com http://www.acxiom.com http://www.InnovationValleyInc.org/automotive http://www.InnovationValleyInc.org/automotive
Table of Contents Feed for the Digital Edition of Automotive News - October 20, 2008 Automotive News - October 20, 2008 Amazingly, vehicle inventories are low An upside of the big slide: Raw material prices dip â for now With GMAC out, banks trickle in Get your daily Automotive News - in video form, starting Nov. 3 Honda's Fukui favors fed loans, confirms V-8 To move the metal, Mike Kahn moves the store Hyundai airbag flaw tied to drink spills Texas promo: Buy a GM vehicle, get GM stock Chrysler's uphill road in China GM/Chrysler? Anything's possible GM/Chrysler deal? Companies' pension plans may need cash Acura dealers: A V-8 engine is on the way Buyers pursue former Heard stores Honda: We're still lending Gilles, Ligocki will speak at congress Fed list promotes high-mileage cars Party time: Saturn turns to grass-roots marketing Online inventory service aims to cut dealer costs Document fees must not become a dirty little secret Just put up a 'For Sale' sign Cash for clunkers? Scrap the idea Arbitration can work for everyone It's time we control our own destiny GM missed boat on Cheyenne, Volt Sept. truck sales fall 7.4% Microheat seeks Chapter 11 At Bosch, r&d spending remains strong GM's new diesel opens up, loses weight Urea must flow or new diesels won't go Hankook plans to bring fuel-saving tire to North America Odell: I can help Volvo tap more potential So far, BMW cruises above the credit crisis Jatco builds China plant to meet expanding CVT demand 10 appointed at American Axle Personnel Milestones Obituaries Supplier Personnel Biking buddies Ford targets fleets with parental control key European sales fall; VW group bucks the trend 11 innovators win honorable mention 25 finalists selected for 2009 PACE awards Suppliers to the 2009 BMW X6 GMAC's loan cutbacks cost GM thousands of auto sales Credit tops agenda for NADA chief 'Flash' draws modest cash at theaters Booth's new berth sparks CEO speculation at Ford Economy's skid sends ritzy toys to eBay Report: Mazda scraps plan for U.S. plant GM's quandary: Finding loans for the imperfect Taylor to Hummer - and then ... ? Tough times at Tesla Automotive News - October 20, 2008 Automotive News - October 20, 2008 - (Page Intro) Automotive News - October 20, 2008 - With GMAC out, banks trickle in (Page 1) Automotive News - October 20, 2008 - With GMAC out, banks trickle in (Page 2) Automotive News - October 20, 2008 - Texas promo: Buy a GM vehicle, get GM stock (Page 3) Automotive News - October 20, 2008 - Companies' pension plans may need cash (Page 4) Automotive News - October 20, 2008 - Companies' pension plans may need cash (Page 5) Automotive News - October 20, 2008 - Gilles, Ligocki will speak at congress (Page 6) Automotive News - October 20, 2008 - Gilles, Ligocki will speak at congress (Page 7) Automotive News - October 20, 2008 - Online inventory service aims to cut dealer costs (Page 8) Automotive News - October 20, 2008 - Online inventory service aims to cut dealer costs (Page 9) Automotive News - October 20, 2008 - Online inventory service aims to cut dealer costs (Page 10) Automotive News - October 20, 2008 - Online inventory service aims to cut dealer costs (Page 11) Automotive News - October 20, 2008 - Arbitration can work for everyone (Page 12) Automotive News - October 20, 2008 - Arbitration can work for everyone (Page 13) Automotive News - October 20, 2008 - GM missed boat on Cheyenne, Volt (Page 14) Automotive News - October 20, 2008 - GM missed boat on Cheyenne, Volt (Page 15) Automotive News - October 20, 2008 - Microheat seeks Chapter 11 (Page 16) Automotive News - October 20, 2008 - Microheat seeks Chapter 11 (Page 16A) Automotive News - October 20, 2008 - Microheat seeks Chapter 11 (Page 16B) Automotive News - October 20, 2008 - Microheat seeks Chapter 11 (Page 16C) Automotive News - October 20, 2008 - Microheat seeks Chapter 11 (Page 16D) Automotive News - October 20, 2008 - Microheat seeks Chapter 11 (Page 17) Automotive News - October 20, 2008 - Hankook plans to bring fuel-saving tire to North America (Page 18) Automotive News - October 20, 2008 - Hankook plans to bring fuel-saving tire to North America (Page 19) Automotive News - October 20, 2008 - Hankook plans to bring fuel-saving tire to North America (Page 20) Automotive News - October 20, 2008 - Hankook plans to bring fuel-saving tire to North America (Page 21) Automotive News - October 20, 2008 - Odell: I can help Volvo tap more potential (Page 22) Automotive News - October 20, 2008 - Odell: I can help Volvo tap more potential (Page 23) Automotive News - October 20, 2008 - So far, BMW cruises above the credit crisis (Page 24) Automotive News - October 20, 2008 - So far, BMW cruises above the credit crisis (Page 24A) Automotive News - October 20, 2008 - So far, BMW cruises above the credit crisis (Page 24B) Automotive News - October 20, 2008 - So far, BMW cruises above the credit crisis (Page 24C) Automotive News - October 20, 2008 - So far, BMW cruises above the credit crisis (Page 24D) Automotive News - October 20, 2008 - So far, BMW cruises above the credit crisis (Page 25) Automotive News - October 20, 2008 - Obituaries (Page 26) Automotive News - October 20, 2008 - Biking buddies (Page 27) Automotive News - October 20, 2008 - Biking buddies (Page 28) Automotive News - October 20, 2008 - Biking buddies (Page 29) Automotive News - October 20, 2008 - Biking buddies (Page 30) Automotive News - October 20, 2008 - Biking buddies (Page 31) Automotive News - October 20, 2008 - European sales fall; VW group bucks the trend (Page 32) Automotive News - October 20, 2008 - European sales fall; VW group bucks the trend (Page 33) Automotive News - October 20, 2008 - Suppliers to the 2009 BMW X6 (Page 34) Automotive News - October 20, 2008 - GMAC's loan cutbacks cost GM thousands of auto sales (Page 35) Automotive News - October 20, 2008 - Credit tops agenda for NADA chief (Page 36) Automotive News - October 20, 2008 - Credit tops agenda for NADA chief (Page 37) Automotive News - October 20, 2008 - Tough times at Tesla (Page 38) Automotive News - October 20, 2008 - Tough times at Tesla (Page 39) Automotive News - October 20, 2008 - Tough times at Tesla (Page 40)
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