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Car market slowdown 'threatens jobs' at Germany's Bosch

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Car market slowdown 'threatens jobs' at Germany's Bosch
Bosch's headquarters in Gerlingen, 9 kilometres west of Stuttgart. Photo: DPA
09:18 CEST+02:00
A global car market expected to slow this year and the continuing aftershocks of a sector-wide diesel cheating scandal will hit jobs at Germany-based Bosch, the world's biggest component supplier.

"Of course, we have to react to falling demand," chief executive Volkmar Denner told Munich-based daily Süddeutsche Zeitung on Tuesday when asked about possible job cuts.

Expected by analysts to contract this year, the global car market is developing "much more weakly than we still thought a year ago," Denner said.

SEE ALSO: Five things to know about Germany's Dieselgate scandal 

"This isn't just a short-term dip that will quickly be recovered," he added.

Reduced demand for diesel-fuelled vehicles "is hitting us particularly hard," said Denner.

About 50,000 of the 410,000 jobs at Bosch worldwide are dependent on the diesel industry, reported FAZ. In Germany, the figure is a full 15,000.

Last year, Bosch cut 600 jobs in this sector by not extending fixed-term contracts or by sending associates on part-time early retirement.

Customers in Germany and abroad have turned away from the fuel since Volkswagen's 2015 admission to cheating regulatory emissions tests on 11 million vehicles worldwide, while investigations have spread to other carmakers in Germany's flagship industry.

SEE ALSO: Germany slaps Bosch with huge fine over Dieselgate role

Meeting tough targets

Many potential buyers have been deterred by already-implemented or proposed
bans for some diesels from city centres, as municipalities try to reduce levels of harmful nitrogen oxides (NOx) in the air.

Meanwhile manufacturers themselves are ramping up alternatives, like hybrid and battery-electric vehicles, to meet tough new EU carbon dioxide (CO2) emissions targets set to bite from next year.

SEE ALSO: Late to the party, German carmakers join race against Tesla

Over the full year, the company expects revenue at the same level as 2018, when sales reached €77.9 billion, rather than the slight increase it had previously predicted.

And "we won't be able to maintain the high level of profitability we had last year," Denner said.

The company said early this year it expected a profit margin of below six percent, rather than last year's seven percent.
    

 
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