German industrial conglomerate Bosch ROBG.UL expects revenue in its core car parts business to decline by about a fifth this year in line with global production volumes.
Despite the cash for clunkers incentive in Germany and some other countries, our turnover with auto components will fall by closer to 20 percent than 15 percent, Bernd Bohr, head of the company's car parts division, told Reuters in an interview.
Sales in this business fell 7 percent to 26.5 billion euros ($36.6 billion) last year, and the conservatively-financed Bosch expects to report this year its first annual consolidated group loss since World War Two.
Bohr said Bosch would not look to copy car parts rival Magna's (MGa.TO) plans for a takeover of carmaker Opel together with Russia's state-owned lender Sberbank (SBER.RTS) by similarly entering the vehicle manufacturing business.
We try to avoid conflicts of interest with our customers, Bohr said.
Despite the forecast loss for the year, he said the privately-owned group saw no need to apply for state aid like Opel, luxury carmaker Porsche (PSHG_p.DE) or bearings supplier Schaeffler that controls Bosch's German rival Continental (CONG.DE).
We recently issued a recent 1.1 billion euro bond that was several times oversubscribed, he said.
Bosch is rated AA- by Standard & Poor's but its outlook was revised late last month to negative from stable.
ELECTRIC DOUBTS
Bohr also threw cold water on hopes that electric vehicles would soon become a viable, competitive product compared to conventional cars powered by combustion engines.
Combustion engines have a right to existence for the next 20 years, in particular in emerging markets, for the transport of goods and in long distance traffic, he said.
Bosch, which estimates an annual global production volume of 2-3 million electric cars in 2020, is a leading supplier of fuel-injection systems.
Bosch earlier on Tuesday said it would make a cash offer to buy out the remaining 23.4 percent of Australia's Pacifica Group (PBB.AX), boosting shares in the maker of spark plugs and other components up by more than a third.
Bosch is a good proxy for demand in the industrial sector due to its broad product portfolio and wide geographical footprint.
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