Bosch CEO expects chip shortage to ease, hopes for return to normal by 2023

BERLIN (Reuters) – Bosch CEO Stefan Hartung expects the chip shortage to lessen significantly in the second half of this year, he said at a press conference on Wednesday, adding he hoped businesses could operate as normal by 2023.

The world’s largest autos supplier must boost its software capabilities while limiting redundancies among the 80,000-odd workers in its 400,000-strong workforce whose jobs are intertwined with diesel technology.

It has invested 1 billion euros ($1.14 billion) in retraining programmes in the past five years and will invest at least the same amount in the coming five, its HR chief Filiz Albrecht said on Wednesday.

Bosch, which also makes household goods and energy systems among other products, reported in preliminary data that its revenue in 2021 exceeded pre-pandemic levels, totalling 78.8 billion euros ($90.00 billion). Its EBIT margin was 4%, up from 2.8% a year earlier.

But its mobility solutions division, which comprises the automotive components segment bringing in most of Bosch’s revenue, saw weaker growth in part due to the lack of chips.

“Last year we felt very clearly that we didn’t have enough chips to meet demand. That will become better in 2022, significantly so in the second half,” Hartung said, pointing out that even the machines to make chips needed chips to work, and so were in short supply. “Hopefully in 2023 we can work at the pace we want to.”

Bosch was not planning any further investments in its own chip production beyond the already announced 400 million euros it has put into chip production sites in Dresden, Stuttgart, and Penang.

The company predicted that 85 million cars would be produced in Europe this year, up from the 80-odd million made in 2021 but far below the 92 million which rolled off assembly lines in 2019.

($1 = 0.8747 euros)

(This story corrects Thursday to Wednesday in paragraphs 1 and 3)

(Reporting by Victoria Waldersee; Editing by Riham Alkousaa)