Bosch sales expected to increase in 2012

Article by Christian A., on January 28, 2012

Even with the bleak economic outlook for 2012, especially in Europe, Robert Bosch -- the largest car parts supplier in the world -- remains confident it will grow worldwide this year. Bosch Chairman Franz Fehrenbach released a statement last Tuesday that stated that the industry will stagnate or enter a recession depending on how rigorously and quickly the reforms in the euro zone are carried out.

Bosch posted record sales in its automotive division of over EUR30 billion, an 8 percent increase from EUR28.1 billion in 2010. Bosch, which has a consumer goods and industrial technology division, predicts that overall group revenues will increase in 2012.

Fehrenbach said that the Bosch Group anticipates an increase in revenue of between 3 percent and 5 percent. Bosch Group said that sales in 2011 increased by 8.8 percent to EUR51.4 billion. However, pre-tax sales results increased by only 5 percent, failing to meet the company's target of 7 percent to 8 percent after increasing material and investments costs were taken out.

Fehrenback said that revenue growth will be driven by China, India and the Americas in 2011. It also predicts that the global economy will increase by about 2.5 percent year-on-year after a 3 percent growth last year.

Bosch had its first annual loss in decades in 2009 as new-car sales plunged due to the world credit crisis. However, the company has since made a comeback due to the growth in North America and Asia. Bosch is set to release full-year earnings on April 26, which is when Fehrenbach will offer a more detailed earnings outlook for 2012.

Last Tuesday, Bosch revealed plans to purchase U.S.-based SPX Corp.'s diagnostic and service tools division for EUR883 million ($1.15 billion) in a move to increase its presence in the sector, particularly in North America and Asia. If approved, this deal would be the largest ever for Bosch's automotive aftermarket division.

If regulators approve the purchase in the usual time frame, the deal may close in the first half of 2012. Robert Hanser, president of the Bosch's Automotive Aftermarket division, said that getting SPX Service Solutions would help in make Bosch “one of the leading providers of diagnostic solutions.”

Hanser remarked that the acquisition would allow Bosch to further expand its market presence in the diagnostics business, especially in North America. SPX, which is based in Charlotte, N.C., said the sale will allow it to focus on other aspects of the business such as beverage and food processing as well as power transformers for utilities.

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