Robert Bosch CEO Stefan Hartung expects the world’s largest parts supplier to benefit from its broad global product range, its software capabilities and its hardware expertise as it caters to changing automaker needs amid the industry shift toward software-defined vehicles (SDVs). This means balancing cost and technology requirements to meet evolving consumer demands, Hartung explained in an interview with Automotive News Europe Correspondent Lois Hoyal at the company's recent Tech Day in Renningen, Germany.
How far is China ahead in terms of automated driving?
China is different because the consumer there is different. That is driving the entire industry. In China, there are a lot of new players that have made this industry really user-oriented. Everyone is currently trying to attract customers with the best consumer value, the most interesting car, the most interesting functionality and the most interesting interior design or mobile phone integration. In China, we are already seeing an attractive Level 2 Plus functionality for [mainstream] consumers. The European consumer landscape is different. In Europe, Level 2 Plus and Level 3 are primarily for luxury cars at the moment. For private cars, we believe that we will see Level 3 applications in China, as well as in Europe. The question is how expensive those applications should be. In China, Level 3 will definitely be financially accessible and geared more toward a mass market.
When will we see Level 4 and 5 autonomy?
The Level 4 question is still on the table. The question is not only if it is technically doable but also if there is a business case for it. Level 5 may still be a long way off. Competition in all classes is so high that in each category automated driving functionality is a differentiator. It is still an open question whether it will be successful for automakers. For us as a supplier, it’s a different game. We have to support everyone who wants to get this on the road and try to offer something that fits.
What distinguishes Bosch from its competitors in terms of software?
One of our key capabilities is that we know all markets and requirements worldwide; therefore, we can offer specific products to customers that are attractive in each market. We work in many areas with automakers that are at the forefront in terms of both functionality and cost. We offer development capability worldwide. We have software capability worldwide and we also have software service capabilities worldwide.
What are most automakers asking for?
There is a big demand in terms of addressing the question of having the right architecture, the right structure of electronics and functional elements; and on the software side, the correct and best base software layer.
How will this play into the move toward software-defined vehicle?
With SDVs, you want to deploy software functionalities and services from the cloud into the vehicle during a vehicle’s lifetime. This will happen for sure in the coming years. That is definitely a game changer. At the same time, each SDV needs hardware. So, that is a huge, important business for us – you still need brakes, drivetrains and more.
Bosch builds 250 million electronic control units with its software each year. Will this number grow?
Bigger control units are replacing small control units. At the same time, more functionality is being added to vehicles to attract consumers. What’s key is having the best approach to manage the new complexity arising from that shift. We believe that we have a good solution to support customers. In the end, it only makes sense if consumer value is increased. This is not purely a technical business, nor is it purely about cost. This is a consumer business, and for consumers providing the right balance is important.
Bosch plans 1,200 job cuts in its software and electronics unit by the end of 2025. Will there be more job cuts?
It was clear from the market situation that we need to make this headcount reduction to remain competitive. It’s a painful adjustment, but we are striving for a competitive situation that should guarantee our progress. This is a dynamic market, so it’s not surprising that from time to time you have to adjust capacity. We are finding mutually agreed solutions to reduce headcount and this will take time and cost money. On the other hand, there are big external factors such as the change to EVs as well as demographic effects so let’s see how we will cope with that.
How will potential tariffs in Europe on Chinese EVs affect the industry?
In general, I am not a big fan of tariffs. If everyone raises tariffs that will mean higher prices and that is bad for consumers and will lead to inflation. Hopefully tariffs will be the last resort. Markets should be created by fair play conditions. I hope that the current tariff discussion doesn’t disturb industrial progress too much. Hopefully it will end in a fruitful discussion and a suitable solution.
