Thanks to a near universal push for improved car safety, Bosch, the German engineering firm, has boosted its profit margin expectations for the next 12 months. Bosch is in a rather unique position, because while it doesn’t manufacture vehicles itself, it does produce driver assistive systems like ultrasound detectors, radar and video sensors which are a big part of pedestrian and obstacle avoidance systems, as well as automated emergency braking, which may soon become a mandatory feature in a lot of vehicles.
The big shift from auto-makers and safety regulators around the world has all come to a head for a number of different reasons, though for the most part because the importance of car safety is more apparent then ever. In India, due to the near quarter million road deaths every year and specifically awful vehicles – in terms of safety – coming through, like the Datsun Go, the government looks set to make safety features like ABS and ENC mandatory, along with airbags. In the US, a similar safety push comes off the back of revelations that the last 10 years have seen millions of cars fitted with dangerously defective airbags and starter motors that have been linked with many deaths and injuries.
While neither incidents have specifically led to regulatory bodies making Bosch equipped safety measures mandatory, the fear has been put into many a car manufacturer and though the average price of vehicles may rise because of it, it looks likely that a lot of cars are going to be equipped with new automated safety features in the near future.
This also comes at a time when Google is making traditional auto-makers look silly with its big developments in the automated car sector. In a scramble to catch up, other car makers like Tesla, Volvo, Ford, GM and VW Audi have all announced their own efforts in taking us step by step towards full driverless vehicles. While that is still some years off, it does mean ever more automated features will be implemented over the next few years, all of which Bosche can supply the parts for.
Whether that will always be the case remains to be seen, as understandably many other electronics makers will be interested in getting in on the increasingly lucrative business. Japan is looking ever more behind the times when it comes to smart and connected car developments, but Korea is just ramping up. It may prove to be a competitor for German engineering in the future, as much as it is a thorn in the side of Japanese electronics.
Bosch group revenue last year reached £36.81 billion, up just over six per cent year on year. It expects sales to continue to increase this year, potentially reaching as high as £37 billion by its end. Full finances for the last 12 months are due in April, so we’ll known more then.