Bosch Group, the world's largest automotive parts supplier, is facing severe financial challenges. According to German media reports, Bosch CEO Stefan Hartung revealed in an internal email to employees that the group's operating profit margin for 2025 will be significantly below 2%, far from the previously set target. This figure has further declined from 3.5% in 2024, and it was 4.8% in 2023.

Despite Bosch's revenue for 2025 being approximately €91 billion, slightly higher than the €90 billion in 2024, this growth is mainly attributed to the additional €4 billion in revenue from the acquisition of Johnson Controls-Hitachi. Excluding the impact of the acquisition and on a comparable basis, Bosch's core business revenue actually declined in 2025.

High Restructuring Costs and Challenges

Hartung pointed out that one of the key reasons for Bosch's shrinking profits in 2025 is the high restructuring cost of €3.1 billion, which is mainly used for layoffs and organizational adjustment plans, accounting for about 3.5% of sales. To alleviate operational pressure, Bosch has launched a large-scale layoff plan. In October 2025, Bosch announced that it would cut 13,000 jobs in its core mobility department, to be completed by the end of 2030. The background of this layoff includes the lower-than-expected demand for electric vehicles, the gradual exit of traditional internal combustion engine business, and intensified competition in the Chinese market.

Hartung also emphasized in the email that the company will not be able to achieve its long-term target of a 7% operating profit margin until at least 2027. He attributed the difficulties to high tariffs, weak economic growth that has curbed consumer spending, and the huge investment required for the electrification transformation of the automotive industry. Despite significant investment in electrification and intelligentization, the decline of traditional parts business has had a noticeable impact on profits.

Transformation of the Automotive Parts Industry

Bosch's predicament is not an isolated case but a microcosm of the transformation period of the global automotive parts industry. Another German supply chain giant, ZF Friedrichshafen AG, reported a net loss of €195 million in the first half of 2025, with its EBIT margin dropping to 1.9% and a high level of net debt. Against the backdrop of the global automotive industry's transformation towards electrification and intelligentization, traditional parts giants are facing enormous operational pressure.

Moving forward, Bosch plans to optimize its cost structure through restructuring and layoffs to meet market challenges. Despite the challenges in 2025 and 2026, Hartung stated that the company will continue to advance technological innovation and business transformation to achieve long-term sustainable development.

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