Bosch, the world's largest automotive supplier, signaled on Friday that 2026 will be another difficult year and said it will not reach its previously announced 7% operating margin target in the near term. The company now expects to begin hitting that margin level no earlier than 2027, revising an earlier forecast that had anticipated achieving it this year.
The company pointed to persistent cost and competitive pressures across the auto parts sector, which it says have been exacerbated by the global rise in import tariffs and falling prices in some product areas. To protect profitability and preserve competitiveness amid those forces, Bosch announced last year further workforce reductions of around 13,000 positions, equivalent to roughly 3% of its total headcount.
Chief Executive Officer Stefan Hartung had cautioned last year that 2026 would be difficult, warning that the automotive industry would "remain a highly competitive sector where there will be a fight over every cent". Bosch's finance chief Markus Forschner said in a company statement that there are "many indications of a slight slowdown in global economic growth" and that competitive and price pressure were likely to intensify, while increased tariffs will exert their full impact for the first time.
Preliminary results for 2025 released by Bosch show sales edged up 0.8% to 91 billion euros. However, the group's operating margin declined to 1.9% from 3.5% a year earlier, underscoring the margin squeeze the supplier faces as it contends with higher costs and pricing headwinds.
From an operational perspective, the company has taken workforce and other measures to defend margins, but the timing for margin recovery has been pushed out as management assesses the cumulative effect of tariffs, price competition and slowing demand indicators. Bosch now anticipates the 7% profitability threshold to be postponed until 2027 at the earliest.
Context note: The company's guidance revision, staffing reductions and preliminary financials together signal that cost and pricing dynamics in the automotive supply chain remain a primary constraint on Bosch's near-term profitability.