Summary
Bosch' strategy focus on innovation is a good one. However, the realities of the downturn in their major markets and the competition in Asia will take time to respond and adjust to. Their major business is in Europe and North America.
Analysis
The Bosch announcement is no surprise given the weak markets in Europe and the US. About 80% of their automotive business is located in these two markets. Bosch has worked hard to expand in Asia and has done well in India. However, with China approaching 12 million vehicles per year in sales and production, the center of the auto making universe is shifting to the east quickly. The Asian car makers have large suppliers like Denso, MELCO, Hyundai MOBIS and others which are strong competition to Bosch. The adjustment to this eastward shift will take some time for Bosch and other major suppliers to adjust to. Bosch' strategy focus on innovation is a good one. However, the realities of the downturn in their major markets and the competition in Asia will take time to respond and adjust to.
This author consults with leading institutions through GLG
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
