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2024 financial reports of the top auto parts compa

author: Elvin [ 2025-03-24 10:08:14 ]

2024 is an important turning point for the global automotive industry. On the one hand, geopolitics, inflationary pressure, anti-globalization and supply chain restructuring are superimposed; on the other hand, the growth rate of the new energy vehicle market has slowed down, especially the European and American markets have cooled down significantly. Faced with a complex and changing market environment, competition among automobile companies is fierce, price wars are one after another, and internal competition is serious. Auto parts giants are facing unprecedented challenges. Recently, Bosch, ZF, Continental, Magna, Freya and many other domestic and foreign parts giants have successively announced their 2024 financial reports. It can be said that they are also showing a phenomenon of "rising in the east and falling in the west". The turnover of traditional international manufacturers has mostly declined and profits have generally shrunk. It is expected that layoffs, factory closures, cost control, and supply chain optimization will follow. Domestic manufacturers, such as CATL and HUAYU Automotive, performed well in 2024. As a key link in the industrial ecology, the development trend of auto parts directly affects the direction of the entire automotive industry. Faced with such severe challenges, how will auto parts companies respond?

                    The three giants: declining profits and accelerating transformation



The overall environment is sluggish, and Bosch, which has been ranked first for many years, is also difficult to be immune. In 2024, global sales will drop to 90.5 billion euros, a year-on-year decrease of 1.2%, and operating profit will drop to 3.2 billion euros, a year-on-year decrease of 30%. The operating profit margin is 3.5%, which is nearly 2 percentage points lower than 5.3% in 2023, lower than expected. Among them, the sales of the automotive division were 55.9 billion euros, a year-on-year decrease of 0.7%. Affected by factors such as weak global economic growth, slowing growth in the electrification market, weak European market, and delayed software platform projects, Bosch's profit margin has been severely squeezed.



In response to the challenges, Bosch plans to control costs, optimize production efficiency, and continue to invest in future technologies such as software and hydrogen energy. Specific measures include: closing five traditional parts factories in Europe, transferring the production capacity of hydraulic brake systems to Mexico, deploying CPS production systems in 50 major factories around the world to increase efficiency and reduce costs, and establishing a global skills matrix database to improve personnel quality and work efficiency. Of course, the most critical part of Bosch's transformation is to accelerate the transformation from a "hardware supplier" to a "software service provider." At present, its software business is progressing well, and the vehicle motion intelligent control system, smart cockpit operating system, and the automotive cloud platform developed in cooperation with Microsoft have all achieved good development. Bosch's goal is to achieve software service revenue of 6 billion euros by 2026, which means an average annual compound growth rate of 78%.
Denso's fiscal year ends in March of each year, so its full-year financial report has not yet been released. Its third-quarter financial report for fiscal year 2025 (April 2024-December 2024) shows: revenue in the first nine months was 528.84 billion yen, down 1.2% year-on-year, and operating profit was 40.16 billion yen, up 68.3% year-on-year; it is expected that revenue for this fiscal year will be 709 billion yen (about 32.85 billion yuan), operating profit will be 550 billion yen (about 25.4 billion yuan), and net profit will be 43.79 billion yen (about 20.29 billion yuan).




The decline in Denso's revenue was mainly due to the decline in auto production in Asia and the suspension of production at Japanese customers, while the profit growth benefited from foreign exchange gains and good cost management. Japanese companies have been performing well in cost control, such as reasonable reduction of parts and raw material costs, optimization of production processes and other measures, partly offset the negative impact of declining vehicle production and rising raw material costs. In order to cope with future cost pressures, Denso will strengthen cooperation with suppliers, optimize procurement strategies, promote parts standardization and universal design, and further optimize procurement and production costs. Facing the future, Denso will cater to the changing trend of the industry and further expand its business in the field of electrified systems and mobile electronic systems based on technology accumulation and market share.
Zf's annual financial results have yet to be released, after the first half of 2024 results showed that its half-year revenue of 22 billion euros, a year-on-year decline of 5.6%. In order to ease the financial difficulties of high debt in recent years, ZF plans to cut costs by 6 billion euros by the end of 2025, including: closing 12 plants, improving production efficiency; Reduce research and development costs; Optimize the cost structure of the central region; Exit from non-core business such as liDAR and L4 autonomous bus production; The axle assembly business will be a joint venture with Foxconn to obtain 500 million euros in revenue. As a result, tens of thousands of layoffs are expected. The latest news, on February 24, 2025, ZF announced the divestiture of the E-Division division, and reluctantly cut down the money-losing business of electric drive that dragged down cash flow, which was really a necessity under the general trend of electrification.



     
       Multinational corporations:
       Layoffs and cost-cutting amid mounting challenges

In addition to the three giants, more auto parts companies are looking for a way out in the difficult market, some internal optimization, some survival, some seek foreign aid, and technology upgrading, business transformation is imminent, but it is not easy. Continental faces the same market challenges as Bosch, Denso and ZF. In 2024, Continental's global sales were 39.7 billion euros, down 4.1% year on year, but net profit totaled 1.2 billion euros, up 1% year on year, which is rare. Sales in Continental's Automotive division fell 4.3 per cent to €19.4 billion, with natural sales down 2.6 per cent excluding the impact of consolidation scope and currency movements, although adjusted EBIT margin increased to 2.3 per cent year on year. The improvement in earnings was mainly attributed to strict cost control, operational efficiency improvements, and price negotiation agreements with automakers.



In the face of the uncertainty of the market environment, Continental Group mainly took measures such as layoffs and adjustment of business structure, in addition, it plans to reduce the proportion of research and development investment to less than 10% by 2027 to ease cost pressure. The company announced more than 7,000 job cuts in 2024 and plans to cut another 3,000 by the end of 2026. The restructuring is mainly the separation of its automotive sub-group and plans to go public independently. Nikolai Setzer, Chief Executive Officer of Continental, said: "With the decision to separate the Automotive sub-group, we have simultaneously launched a restructuring of the company. Each of our sub-groups has reached a mature stage and is well positioned to achieve greater operational autonomy." Before 2021, Continental Group had split its powertrain business group, the independent Peipai Technology successfully listed in Frankfurt, and was acquired by Schaeffler in 2024.
In a tough market environment, Magna, the North American auto parts giant, has achieved both sales and profit growth with its excellent operational management capabilities, becoming one of the few warm colors in the industry. Magna posted sales of $42.8 billion (about 39.365 billion euros) in 2024, compared with $42.797 billion a year earlier, and adjusted EBIT of $2.3 billion, compared with $2.238 billion a year earlier. Swamy Kotagiri, Chief Executive Officer of Magna, said: "With operational excellence as its cornerstone, Magna has successfully delivered profit growth and cash flow improvement through prudent business restructuring, prudent capital expenditure reduction and aggressive business recovery."



For the full year 2024, total sales of €26.974 billion were down 1.0%, operating profit was €1.4 billion, down 2.7%, while net debt was reduced by €400 million and net cash flow was €655 million. Furia will take a number of measures such as operational excellence and the reduction of fixed costs. The EU-FORWARD project, launched in early 2024, will affect 10,000 jobs over five years. The "West to East" strategy is also one of its key measures, as 21% of total sales in 2024 will come from China, and operating margins have achieved double-digit growth, and Freya will continue to accelerate growth in China and the Asia region. In 2024, Freia sold its stake in BHTC to AUO Corporation and Hug Engineering, a business focused on high-horsepower engine emission reduction systems, to Ogepar. This year, Freia will continue to aggressively pursue its asset divestiture program aimed at accelerating the group's deleveraging process.



Lear's sales in 2024 were $23.306 billion, down slightly from $23.467 billion in 2023, core operating income was $1.096 billion, operating margin was maintained at 4.7%, and net income was $507 million, down 11.5% year-on-year. In the face of challenges, Lear continues to take multiple measures such as accelerating automation, optimizing production layout, and deepening cooperation with Chinese brand car companies. Lear closed or sold more than 10 plants around the world last year and will do so again this year. In the two years from 2024 to 2025, Lear is expected to cut 25,000 to 30,000 jobs. Faced with the challenge of rising Labour costs in the US and Mexico, Lear is also looking to shift some labour-intensive operations, such as wire harness manufacturing, to low-cost countries in Africa and eastern Europe.

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