OREANDA-NEWS. July 06, 2015. The Bosch Group is planning to realign its Starter Motors and Generators division and to seek a partner for a joint venture or a buyer. Together with a partner or a new owner, the division will have long-term prospects of growth and development.

Reasons for the planned realignment
The market for starter motors and generators is extremely competitive and cost-driven. There is also considerable overcapacity in the market. The already existing cost and competitive pressure will become even tougher. As a result, many companies will go out of business. And to survive the anticipated shake-out in the market, the Starter Motors and Generators division has to reach a leading global position in the market. For this, it needs to be a sufficient size. Only in this way can it remain successful in the market over the long term. With a partner or new owner, moreover, consolidation effects can be achieved and costs reduced.

Progress made up to now will not be enough over the long term
The Starter Motors and Generators division has successfully managed to transform itself over the past few years. However, the progress made so far is not enough for the business to have a successful future. The losses of past years run into many hundreds of millions of euros. The division is now performing soundly. In recent years, it has improved its competitiveness by making its structures simpler and more flexible, among other things. The division also has technically and commercially competitive products, but these products do not stand out sufficiently from rival ones. Then there are the additional challenges resulting from technological trends such as downsizing and electrification. These trends will mean a change in value-added and market potential.

The starter motors and generators in the global market
Over the past five years, the Starter Motors and Generators division has been unable to significantly increase its market share. It has not managed to close the gap on the top players in the market. And while the Starter Motors and Generators division is one of the leading suppliers in Europe, it is at a clear global disadvantage with regard to its regional presence, especially in the growth markets of Asia and North America. In recent years, the division has grown strongly in Asia and North America. However, its market shares are still not as big as those of its competitors. In both Asia and North America, its market shares are small. In 2014, it generated only roughly one-quarter of its total sales in Asia, for example. Especially in Europe, where the division generates more than half its sales, the division is struggling with a drastic fall in prices. In some product areas, prices have fallen by just under a quarter since 2011.

The next steps
As a first step, the division is to be carved out and made a legally independent entity by the end of 2015. In addition, the quest for suitable partners and potential buyers will continue. All these steps will be taken in close and frank consultation with the employee representatives.

About the Starter Motors and Generators division
The Starter Motors and Generators division generated sales of 1.4 billion euros in 2014. For passenger cars and commercial vehicles, the Starter Motors and Generators division develops and manufactures starter motors and alternators that play an important part in reducing consumption. Its products include the start-stop system, highly efficient generators, and machines for the boost recuperation system (entry level hybrid). At 13 manufacturing sites and multiple sales locations worldwide, the division employs around 6,500 associates, some 1,400 of them at its German locations in Hildesheim and Schwieberdingen. Outside Germany, there are locations in Brazil, China, Hungary, India, Mexico, South Africa, Spain, and the United States.