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The three automobile supply chain giants have laid off staff!

2024-07-14 Update From: AutoBeta NAV: AutoBeta > News >


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The automobile industry accelerates the transformation to the direction of new energy, and begins to sweep the scale of traditional auto parts suppliers.

On January 19th Bosch announced that it planned to cut about 1200 jobs in its software and electronics divisions by the end of 2026, of which 950, or about 80 per cent, would be in Germany. It is understood that this is the second time in two months that it has announced layoffs. On December 10, 2023, Bosch said that the drive division of two plants in Germany would need to cut up to 1500 jobs in development, management and sales by 2025 to adapt to the changing needs and technology of the automotive industry.

As for the reasons for the layoffs, Bosch said bluntly that "the reduced demand for jobs in the electric vehicle sector, coupled with high inflation and a weak economy, forced its budget to develop self-driving technology to be cut." Simply put, Bosch hopes to cope with rising costs and slowing growth through layoffs to adapt to the changing needs and technologies of the automotive industry, as the traditional automotive industry accelerates new energization. "in the next year or two, it will be difficult for the company to meet its expected sales and profit targets," Bosch CEO Stefan Hartung said in an interview. "2024 will be more difficult than expected, and it may be the same in 2025."

In addition to Bosch, the layoffs were also announced by Valeo and Zaifu.

Valeo announced on January 19th that it would cut 1150 jobs worldwide, a move by the company to make its organization more competitive. Valeo said that the purpose of the layoffs is to improve the competitiveness and efficiency of the group in the context of car electrification and hopes to enhance our competitiveness by establishing a more flexible, coherent and complete organization.

On January 18th, ZF announced that it would cut 12000 jobs by 2023, equivalent to almost 1/4 of all ZF jobs in Germany. The core reason for ZF's layoffs is the electric transformation. "We want to keep jobs, but we know that the transition to electrification alone will lead to fewer jobs." Zaifu said that compared with the internal combustion engine car parts, the labor required to make electric vehicle parts is halved.

Whether it is Bosch, ZF or Valeo, the root cause of layoffs can be attributed to the decline in demand brought about by the electrification transformation. When the automobile industry accelerates the electrification transformation, the market development space of traditional auto parts suppliers is gradually compressed. These traditional auto parts suppliers are seeking change in the trend of automobile electrification, in order to maintain their own industry status and future development.

Before the rise of the electric car market, auto parts suppliers such as Bosch, mainland China, Aixin and Zaifu firmly controlled the key technologies of core components such as engines, gearboxes and chassis systems. many Chinese car companies will use Aisin gearbox and Bosch braking system as the key selling points of their products. With the rise of electric vehicles, core components such as engines and gearboxes are directly abandoned. In addition, in the era of new energy vehicles, the product development cycle has been shortened from 36 to 48 months to 18 to 24 months. In this environment, Chinese suppliers show a better fit, while overseas suppliers show some disobedience.

In this round of industrial reform, both Chinese car companies and Chinese supply chain enterprises are showing a faster speed of transformation, while overseas car companies and supply chain enterprises, although they have already started the road of transformation, are obviously slower than their Chinese counterparts. At the same time, the current changeable industry, international situation and other external environment, also let the elephants of the giants turn around, under more pressure.

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