Frankfurt - The world's biggest car parts supplier, Robert Bosch, unveiled a cost-cutting drive Wednesday after its 2012 sales fell short of target amid weaker demand in the global auto sector.
The Stuttgart-based company also said its troubled solar business booked combined losses and write-downs of about 1 billion euros (1.33 billion dollars) last year.
Bosch said group sales rose 1.6 per cent to 52.3 billion euros last year, well below the 3- to 5-per-cent range it had originally targeted.
Chief executive Volkmar Denner said Bosch faced “a hard year” of cost cutting with the group also considering the introduction of more flexible working hours and wages.
As a result, Bosch, which is also a major technology group, became the latest German company to announce a cost-cutting drive after Europe's debt crisis hit sales and earnings across the region's corporate sector.
Bosch is also to review its business structure in its core European market as part of a wider effort to boost group competitiveness.
It did not, however, provide concrete details of its savings plans.
Total sales in Europe fell 2 per cent to 29.7 billion euros, while sales in North America jumped 9 per cent and 5 per cent in the Asian-Pacific region.
But while it set out its latest results, the group failed to spell out how it intended to deal with the big losses in its solar business operations.
Analysts believe that this could include finding a partner for the solar unit or even closing it down.
Denner said: “This is theme that it is still too early to talk conclusively about.”
In 2012, Bosch's solar offshoot posted an operating loss of 450
million euros compared with a loss of 560 million in 2011.
At the same time, the group's write-downs for the solar operations jumped to 600 million euros last year from 560 million in 2011 amid intense competition from the Asian solar power industry and a cutback in government support.
The release of the Bosch figures coincided with German engineering giant Siemens saying its Spanish-based solar business incurred a 150-million-euro loss in the three months to the end of December.
Munich-based Siemens said in October it planned to pull out of its renewable energy business.
Bosch entered the solar business in June 2008 when it acquired a majority stake in the former East German sun power group, Ersol Solar Energy.
But on Wednesday, Bosch said prices for its solar energy products had plunged 40 per cent over the last two years.
But Denner said: “We are firmly convinced that energy from natural light is of enormous importance to humanity.” - Sapa-dpa