Many big companies are going down due to the coronavirus outbreak. The automobile company is worst affected by these extraordinary situations.
On Wednesday, Robert Bosch German auto supplier stated that it is expected that the production is falling by 20% this year. As the coronavirus has slammed the production and saps demand. He also stated that our company is bracing everything for a global recession. It is very difficult to get a small result. To cut the cost, the company has punched timeframes for making some of the investments. In Germany, working hours have been reduced, also only a few of the workers are working. They have also imposed salary reductions. Managers and executives’ salaries have been cut by 20% in the months of April and May.
In the month of January, before the coronavirus pandemic, Bosch warned the global car production that they have already reached their peak. But it showed weaker demand in Asia.
The Bosch sale was about 77.7 billion euros last year. The earnings before the taxes fell to 38% to only 3.3 billion euros. The EBIT margin dropped from 4.2 % to 7% in the year 2018.
Bosch is trying to return to 7% margin from operations. EBIT is I’m warning before interest and taxes.
The company stated that development expenditure shows that it amounted to 6.1 billion euros or about 7.8 billion of sales.
But the sales have shown complete weakness. It dropped by 7.3% in the first quarter. Mobility services segment shows a 7.7% decline.
The company said that if the production is ramped up in China and European industry. But, the company has to ramp-up on its own. There will be a global recession because of this coronavirus outbreak.
After all of this Bosch also stated that they will produce half a million face masks a day after they used their special-purpose machinery department.