Some of the biggest European auto suppliers have seen their profits slump over the past year, but Robert Bosch -- the largest of them all -- has been a notable exception. The German supplier's Mobility Solutions division, which is dominated by automotive activities and accounted for more than 60 percent of the company's revenue last year, increased sales 0.4 percent to 47.6 billion euros. The division's profit margin of 7.1 percent was down slightly on the 7.3 percent from 2017 but earnings rose to 3.53 billion euros last year from 3.35 billion euros in 2017.
That improvement was against a backdrop of falling automotive production, worries about escalating trade wars, a slump in Chinese vehicle sales, uncertainty in Europe around Brexit and tightening emissions standards, including significant disruptions from the new Worldwide Light vehicle harmonized Test Procedure, or WLTP. "Although the economy slowed down in 2018, Bosch sales and results are once again at a record level," CEO Volkmar Denner said in May at Bosch's annual results conference outside of Stuttgart.
Meanwhile, operating profit fell 12 percent at Bosch's biggest rival, Continental. In addition, ZF Friedrichshafen, the third-largest Europe-based supplier, saw its earnings fall 14 percent and Schaeffler reported an earnings decline of 13 percent. Stephen Reitman, European automotive analyst at Societe Generale in London, said Bosch had been able to successfully balance operational excellence with research and investment in future products.
"They performed pretty strongly in what was quite a difficult environment," he said, noting that on a currency-adjusted basis Bosch's growth was even more impressive. "Where some companies have stumbled is that perhaps they have been spending a lot of time and management effort on new portfolio businesses -- the stuff that is coming out in a few years' time -- and there has consequently been less focus on the day-to-day business. Bosch is clearly among the winners in achieving the right balance," he said.
Bosch executives pointed to a number of strong product lines that kept the Mobility Solutions unit in the black. Among them were systems and components for exhaust gas treatment, transmission technology and driver assistance. "It comes down to focusing on your products and knowing your customers," Reitman said, adding that it was critical not to become too dependent on specific automakers given the global uncertainties right now. "They have demonstrated the ability to ride the waves of the industry better than some of the other suppliers."