FRANKFURT (Reuters) – Bosch, the world’s largest automotive supplier, on Thursday warned of further cost cuts and staff reductions, forecasting stagnating vehicle production that will keep a lid on profit margins in 2024.

“For 2024, we aren’t expecting any economic tailwind,” Chief Financial Officer Markus Forschner said at the group’s annual press conference. “Restructuring and process improvements will also have a negative impact at first, with their positive effect coming only after a delay.”

Forschner said cuts were necessary to make sure Bosch remains competitive in an environment where most of its big peers, including Continental and ZF Friedrichshafen, have all announced layoffs.

He said any cuts would be put in place “with a sense of proportion”, not elaborating how many of the group’s 429,416 employees would be affected.

For 2024, Bosch expects revenues to grow by 5%-7%, compared with an increase of 3.8% last year. Its margin on earnings before interest and tax from operations will remain stable at best compared with the 5.3% generated in 2023.

Forschner said these targets were ambitious given first-quarter sales were down 0.8% year-on-year, reflecting more challenging conditions for the global automotive sector, including higher costs and a fierce pricing battle in China.

(Reporting by Christoph Steitz; Editing by Chizu Nomiyama)

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