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Cylindrical roller bearings from Schaeffler: Not only Schaeffler is suffering from the radical change in the automotive industry. Bosch, Leoni, Conti, Aumann, Infineon and BASF are also preparing for difficult times
Trade war, weak demand, farewell to internal combustion engine: The German auto industry is in its most difficult phase for more than ten years. While profits and revenues are declining, the switch to electromobility requires billions in investment. The change in Germany’s key industry is not only reflected in the balance sheets of the automaker Daimler Show stock market chart, BMW Show stock market chart and Volkswagen Vz. Show stock market chart noticeable, put the austerity programs and reduce jobs. The automotive supplier industry, with numerous medium-sized companies one of the most important employers in Germany, is coming under increasing pressure.
The boom of the German auto industry with years of increasing sales and profit increases is over: the industry has to adjust to a longer and more difficult time of upheaval. The latest news from Schaeffler Show stock market chart, Bosch and Aumann underline how dangerous the situation is for suppliers at present.
Schaeffler profit breaks down
The automotive and industrial supplier Schaeffler suffered in the second quarter of the current fiscal year under the meager auto economy. The surplus broke by half to 136 million euros, as the SDax Group announced on Tuesday when presenting its final figures in Franconia Herzogenaurach.
Already end of July Schaeffler had lowered its profit and turnover forecast for the current financial year and appeared to be more pessimistic. The new forecasts have now been confirmed. The auto and industrial supplier is getting more and more affected by the slowdown in the auto industry, as it makes the bulk of its business with carmakers. According to final figures, the francs posted a decline in sales of one percent to 3.6 billion euros in the past second quarter.
Bosch announces significant job reduction
Also the world’s largest supplier Bosch is in a difficult situation, “The tailwind is gone,” said CEO Volkmar Denner the “Süddeutsche Zeitung”. Bosch sales this year will only be at the previous year’s level and the company will not be able to maintain the high level of the previous year. In addition, a clear job reduction is now planned, especially at the diesel sites. “Of course we have to respond to the declining demand,” Denner told the newspaper. The scope is not fixed yet. “However, we are doing everything we can to implement this in a socially acceptable way,” he added. “There are many possibilities: time accounts, severance packages, early retirement schemes, reducing the number of temporary employees.”
Bosch currently employs 410,000 people worldwide. According to the company, sales in the financial year 2018 amounted to 78.5 billion euros. The car market is developing very weakly, “much weaker than we all thought a year ago,” said Denner. It is not a short-term dent that can be made up quickly. “In our planning, we assume that automobile production will stagnate in the coming years, unlike in the past, when it almost always went up,” said the Bosch boss.
Continental warns of lower profits
Automotive supplier and tire maker Continental was forced to abandon the weakening auto industry in late July to revise its forecasts for sales and profit margins, Group did not announce a job reduction at this time. “For the second half of the year, we are now less optimistic than before,” said CFO Wolfgang Schäfer. “The reason for this is the ongoing downward trend in automobile production in Europe, North America and especially in China.” Unresolved trade conflicts also contribute to economic uncertainty.
Especially for the car supply division, which depends directly on the production volume of the automaker, the prospects are getting darker. Unexpected changes in customer call-off behavior led to volume reductions for certain products in the division, it said. In the second half of the year, there could also be provisions for warranty claims, warned Conti. Conti had to cut its own business outlook twice last year.
Also Autozulieferer Aumann with problems
The mechanical engineer Aumann also had to significantly reduce its forecast for the current financial year at the beginning of July. The SDax Group suffers from declining vehicle sales and uncertainty in the auto industry. The stock has collapsed.
In terms of sales, Aumann now expects only 240 to 260 million euros, as the company announced in Beelen, North Rhine-Westphalia. So far, the company had planned to go on top of the 290.8 million euros of the previous year. Adjusted operating earnings before interest and taxes (EBIT) also forced the mechanical engineering industry to retreat into disillusionment among investors. It should be at best 22 million euros. “Dependent on the further market development” it could become however also only 16 million euro. Originally, the Beelener had targeted to surpass the 2018 generated 29.3 million euros.
The reluctance to invest and cost discipline at manufacturers and suppliers would have had a negative impact in the course of fiscal year 2019, it was said. Repeated shifts in contract awards with significant volumes would have led to a disappointing order intake of € 85 million in the first half of the year. Aumann assumes that the negative factors will persist beyond the current financial year. Among other things, Aumann manufactures machines and automated production lines for the automotive industry and products for the manufacture of electric motors.
with news agencies