G. Navinel, Bosch: “We are not dependent on shareholder-driven ratios”

Gaël Navinel: A year of two halves: a buoyant first semester, followed by a deceleration from the summer onwards for all divisions, held back by the global economic slowdown. The reasons for this are the same for everyone: inflation and rising interest rates, with all their repercussions on logistics, parts costs and inventory. Except that at the same time, we are committed to colossal investments–electrification, new technologies, ADAS, hydrogen (€2 billion over five years)… – with no immediate return on investment.

G.N.: The United States is undeniably a growth driver. Europe and China are more complicated, particularly in the second half of the year, for the reasons I have just mentioned. In Europe, we are not yet talking about a decline, but rather a slowdown, compounded by consumer uncertainty about car consumption (purchase and maintenance). Against this backdrop, the on-road vehicle fleet is ageing, and it is once again the aftermarket that is reaping the rewards!

G.N.: We should have a good year in 2023, with growth of between 8 and 11%! The momentum is there for the Group worldwide, but particularly in Europe. It’s worth noting that we are seeing uniform growth in the Nordic countries, Ireland and the UK, Germany and Southern Europe, but with an acceleration in Turkey and the Middle East. 

G.N.: We have reviewed flows and inventories, and tried to protect ourselves against price rises, so as not to pass them on too much downstream. We have shortened distances by relocating some production, such as windscreen wipers that were previously manufactured in Asia. We are working more closely with our clients on the best way to profile their inventories and avoid extra costs. This monitoring applies country by country, down to the last part number, and goes all the way up to top management, to ensure the best possible availability rate. We have a service rate of90% for some products, with the aim of exceeding 95%. We are gaining points every month. And I should point out that the Covid-19 crisis demonstrated that we were one of the best performers in logistics! Once again, we have the stability of a foundation and are not dependent on shareholder-driven ratios. We work for the long term. 

G.N.: On the first point, only occasionally, and only for certain products, but nothing substantial compared with what we saw in the past! Logistics flows are certainly recovering and reconsolidating. I can observe that the rise in interest rates is encouraging some of our clients to reduce their inventory and rely on the equipment supplier, who has regained stability in its own supply chain. In terms of costs, we have overcome a number of unprecedented obstacles for products from Asia: containers held up for months in the Suez Canal, soaring prices, the obligation to find alternative routes, in particular via the Trans-Siberian Railway, this route being then blocked due to the war in Ukraine, etc. To avoid this situation again, we are repatriating everything we can to Europe, which reduces our lead times but also our carbon footprint! This is consistent with our CSR objectives, since we are already carbon neutral on Scopes1and 2– all Bosch production sites worldwide and offices have been carbon neutral since 2020 – and we are targeting Scope 3, including transport. 

G.N.: Yes, because digital technology is transforming workshop practices at a time when repairers are having to climb a never steeper technological ladder. This is why we are constantly launching new services: Remote Diagnostic, a technical hotline that takes control of the workshop’s KTS diagnostic tool (coupled with ESI[tronic] 2.0software) for updates; remote coding, which appeared at the beginning of 2023, just after Secure Diagnostic Access(SDA), the platform that simplifies the process of repairers registering with manufacturers’ portals to unlock protected access to vehicle data. In 2024, we will be launching State of Health (to check the condition of an electric vehicle’s batteries) or access to the EDR (data recorder) to find out the accident history of used vehicles, for example. This is a major challenge, because we are opening the doors of our workshops to new customers and enabling independent repairers to stop subcontracting this type of operation to dealers, by handling complex operations themselves.

G.N.: Of course, because it is driven by regulations, such as the Euro 7 standard, which imposes a reduction in braking particles, implying a specific brake pad with a specific set of discs. This momentum is also fuelled by the Software Defined Vehicle (SDV),where each new model is designed around software. This automotive revolution has led Bosch to reorganize its worldwide Mobility division from 1st January 2024. The teams will work more transversally and on a single core business with a central IT system. This is the biggest structural change in the group’s international history.

G.N.: This is an important point to bear in mind, given that manufacturers have to manage data security, particularly as vehicle updates are increasingly carried out ’over the air’. This need for security should not be at the expense of independent repairers, wherever they may be in the world. This is why we provide solutions that guarantee manufacturers’ protocols and give repairers access to vehicle data, with our Gateway solutions. Secondly, laws, particularly European laws, are very clear on free access. But they then have to be complied with.

G.N.: The answer is complex, because each zone has its own rules, including Europe, the United States and, of course, China, which is making great strides in the electrical and software sectors. We employ 70,000 people in our chinese subsidiary. Our role as a global supplier is to adapt to each region, each market, each country. In India, for example, we are working very hard on two-wheelers. India is a driving force in terms of R&D. In Europe, the regulatory framework, with its standards, creates a degree of uniformity. Then it is the support policies in each country that generate differences from a technical and technological point of view. I would mention the common problem of human resources, throughout Europe. The automotive industry needs people and skills at a time when vehicles are becoming increasingly complex. Clearly, we need more and more people who are better trained in cutting-edge techniques. From every perspective, we’re in the midst of a revolution! 

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