Bosch is reorganizing its Mobility Solutions business sector, giving it more autonomy within the huge supplier’s corporate structure, and forecasting a surge in revenue to $88 billion by the end of this decade.
The change reflects the auto industry’s global shift away from the parts and hardware that make up vehicles powered by internal combustion engines, a business that has made Bosch a global leader over the past century. In the coming decade, automakers will increasingly rely on technologies that can update and alter a vehicle’s performance or improve its safety.
The German company’s unit will be called Bosch Mobility and led by Markus Heyn, chairman of Mobility Services since January 2022, the supplier said. The change will be effective Jan. 1, 2024.
Its expected growth engines will include automotive software, which Bosch says has been growing by “double digits” in recent years. The company estimated the segment will have a global market value of just under $220 billion by 2030, three times what it is now.
“For some time now, Bosch has also seen itself as a mobility software company,” Heyn said in a statement. “Now, in response to customer requirements, our structure is changing to reflect this and to open up further growth.”
Bosch said reorganizing its mobility business will help various units work together better and faster, citing the example of a new vehicle stabilizing system that can reduce braking distance. The system is based on Bosch’s own vehicle dynamics control software, as well as its braking control hardware.
Bosch Mobility will be the largest of Bosch’s four business units, in addition to energy and building technology, industrial technology and consumer goods. It will have seven divisions:
1. Electrified motion, from electric axles to even seat adjusters
2. Vehicle motion, such as steering and traction control
3. Power solutions, including internal combustion and hydrogen technology
4. Cross-domain computing solutions for automated driving and parking
5. Mobility electronics for ECUs and in-house semiconductor activities
6. Mobility aftermarket
7. Electric bike systems
8. ETAS for “hardware agnostic” software for operating systems and engineering tools.
In discussing its 2022 earnings this month, Bosch said its Mobility Solutions accounted for about $57.77 billion last year. Sales were up by 16 percent, with the margin at 3.4 percent vs. 0.7 percent in 2021. Bosch is not a publicly traded company, and 94 percent of its share capital is held by Robert Bosch Stiftung, a charitable foundation.
The company expects 6 to 9 percent revenue growth in 2023, up from $96.86 billion in 2022, with an earnings before interest and taxes margin of 5 percent, up from 4.3 percent in 2022.
Automotive and heating systems will be key growth drivers in 2023, CEO Stefan Hartung said.
“Despite chronic chip shortages and only weak growth in automotive production, we were able to considerably increase our mobility-related sales,” CFO Markus Forschner said in a release.
Bosch is ranked No. 1 on Automotive News‘ list of the top 100 global suppliers, with worldwide sales to automakers of $49.14 billion in 2021.