Bloomberg Audio Studios, podcasts, radio news.

Bloomberg Audio Studios, podcasts, radio news.

Let's go to Berlin right now, Bloomberg's Oliver Crooks semi blind with an interview with a key player from the under pressure auto industry.

Let's go to Berlin right now, Bloomberg's Oliver Crooks semi blind with an interview with a key player from the under pressure auto industry.

Only that's right, Tom, and listen, it's not just the auto industry, because this is the sort of story that sits at the very center of the biggest sort of stories we've been talking about for the last few months, whether it's AI semiconductors, the auto industry, terrorists, and of course the German economy. So I'm very pleased to be to speak to somebody who really sits at the heart of all of all of these stories brought together. It is the CEO and chairman of BOSH. Because Bosh, we should just say, in addition to being one of the biggest companies and employers in Germany, it's technology that it's in half of all the smartphones, it's almost in everybody's home, and it's in literally almost every single car on the planet. So, chefon Hatoon, thank you so much for your time. Today. We should start in the auto industry because we have more difficult news out of Volkswagen today and probably your order book is one of the clearest indications of what is to come in terms of demand for the auto sector. What are you seeing there.

Only that's right, Tom, and listen, it's not just the auto industry, because this is the sort of story that sits at the very center of the biggest sort of stories we've been talking about for the last few months, whether it's AI semiconductors, the auto industry, terrorists, and of course the German economy. So I'm very pleased to be to speak to somebody who really sits at the heart of all of all of these stories brought together. It is the CEO and chairman of BOSH. Because Bosh, we should just say, in addition to being one of the biggest companies and employers in Germany, it's technology that it's in half of all the smartphones, it's almost in everybody's home, and it's in literally almost every single car on the planet. So, chefon Hatoon, thank you so much for your time. Today. We should start in the auto industry because we have more difficult news out of Volkswagen today and probably your order book is one of the clearest indications of what is to come in terms of demand for the auto sector. What are you seeing there.

We are still growing in the older industry also this year, but let's be very honest, the OLO industry didn't grow as much as we anticipated. So the overall production of vehicles will be pretty much flat.

We are still growing in the older industry also this year, but let's be very honest, the OLO industry didn't grow as much as we anticipated. So the overall production of vehicles will be pretty much flat.

It will be a very small growth.

It will be a very small growth.

Just few pockets are left of growth, like India for example, or the Chinese export. There's still some growth in the better electric vehicles, but we see a big shift actually, not only that there is no volume growth, but the shift is away actually from the big growth numbers of bettery electric cars to plug in hybrids. So that is challenging in this industry because if you change production programs in this industry, that's a big thing.

Just few pockets are left of growth, like India for example, or the Chinese export. There's still some growth in the better electric vehicles, but we see a big shift actually, not only that there is no volume growth, but the shift is away actually from the big growth numbers of bettery electric cars to plug in hybrids. So that is challenging in this industry because if you change production programs in this industry, that's a big thing.

It takes a very long time. So do you see any reason to be sort of more optimistic about things turning around or do you think we're in this for at least another two years or so.

It takes a very long time. So do you see any reason to be sort of more optimistic about things turning around or do you think we're in this for at least another two years or so.

Well, long term, we know things will change towards a better electric vehicles and that's a good thing, but definitely the ice technology, so the engines will be needed longer.

Well, long term, we know things will change towards a better electric vehicles and that's a good thing, but definitely the ice technology, so the engines will be needed longer.

That's what we always thought. So there is a.

That's what we always thought. So there is a.

Technology open approach now coming by the consumer, because the consumer freely decides what he wants to buy. Our first, you see with a flat production line that the consumer decides less, so it just waits and takes the car a bit longer, which is bad for the industry. On the other end, the consumer is deciding to buy more pluck in hybrids, which is more to see neutral. But in the long run, I'm still optimistic full electricfication will happen.

Technology open approach now coming by the consumer, because the consumer freely decides what he wants to buy. Our first, you see with a flat production line that the consumer decides less, so it just waits and takes the car a bit longer, which is bad for the industry. On the other end, the consumer is deciding to buy more pluck in hybrids, which is more to see neutral. But in the long run, I'm still optimistic full electricfication will happen.

And I'd like to also get your broader picture in terms of global demand. Because you're in obviously homes, you're in consumer goods, you're in obviously cars, you're in smartphones. What is the sort of picture of global demand across all of your different businesses.

And I'd like to also get your broader picture in terms of global demand. Because you're in obviously homes, you're in consumer goods, you're in obviously cars, you're in smartphones. What is the sort of picture of global demand across all of your different businesses.

Well, if you look at consumers, which drive most of it, right, which is our home kitchen appliance business, but also a power towards consumers are hesitant on spending. You see that in China and Europe. You see it less in the US. By the way, the US consumers always much more resilient in this terms, right, But you see in these two sectors are quite strong resilience, so people wait a moment to buy.

Well, if you look at consumers, which drive most of it, right, which is our home kitchen appliance business, but also a power towards consumers are hesitant on spending. You see that in China and Europe. You see it less in the US. By the way, the US consumers always much more resilient in this terms, right, But you see in these two sectors are quite strong resilience, so people wait a moment to buy.

Also for cars, so on all the doorables.

Also for cars, so on all the doorables.

You see that hesitation which comes from unclear regulation or unclear view. If this is good, if it's a good case for the consumer, they calculate, right, they don't just do it.

You see that hesitation which comes from unclear regulation or unclear view. If this is good, if it's a good case for the consumer, they calculate, right, they don't just do it.

More things And one of the things that are obviously going to be paying attention to as well as the election in the United States, how prepared are you for potentially ten twenty percent terrorsts in the event of a Trump administration. Does that make you look at your manufacturing and production footprint?

More things And one of the things that are obviously going to be paying attention to as well as the election in the United States, how prepared are you for potentially ten twenty percent terrorsts in the event of a Trump administration. Does that make you look at your manufacturing and production footprint?

Well, definitely.

Well, definitely.

I'm not a big fan of terrorsts, right, that's clear because terrors kind of hinder the global collaboration and that's important for technology. But you know, the election brings also certain clarity. So over the next month some clarity will come what the direction is, and then industry will adjust.

I'm not a big fan of terrorsts, right, that's clear because terrors kind of hinder the global collaboration and that's important for technology. But you know, the election brings also certain clarity. So over the next month some clarity will come what the direction is, and then industry will adjust.

Everybody will be able to adjust. Allo, that's a good thing.

Everybody will be able to adjust. Allo, that's a good thing.

By nation of the election, how the policy actually will work we have to see. But in general, the US is still the strongest figures, i would say, globally, so probably the recovery is coming there fastest, The gross is coming the most eminent, so you have to be there. And that's why we shift and bought big time towards US investments. We did the investment for the semiconductor in California. We bought JCI and Titachi for the condition business, and that's the strategy to go.

By nation of the election, how the policy actually will work we have to see. But in general, the US is still the strongest figures, i would say, globally, so probably the recovery is coming there fastest, The gross is coming the most eminent, so you have to be there. And that's why we shift and bought big time towards US investments. We did the investment for the semiconductor in California. We bought JCI and Titachi for the condition business, and that's the strategy to go.

And the other question is, of course the Chinese economy, where we've seen a lot of distinct weakness. But I have a theory I'd like to test on you, which is that when demand comes back within the Chinese economy, is it really for the same items that we've been talking about historically because it's been demand's been out for about four years. Is it for German ices? And is it for really the same components because China has really been trying to make its own component industry as well.

And the other question is, of course the Chinese economy, where we've seen a lot of distinct weakness. But I have a theory I'd like to test on you, which is that when demand comes back within the Chinese economy, is it really for the same items that we've been talking about historically because it's been demand's been out for about four years. Is it for German ices? And is it for really the same components because China has really been trying to make its own component industry as well.

Now China is changing from a pure production manufacturing based system and a market for importers right towards the technology based system, which is driving its own innovation and bringing great product in China for.

Now China is changing from a pure production manufacturing based system and a market for importers right towards the technology based system, which is driving its own innovation and bringing great product in China for.

The Chinese people.

The Chinese people.

The consumer is extremely demanding, very high tech driven, loves high tech functions. So you see way more level two plus driving, which is full automated driving, but you are still responsible. So it's a thing which is much cheaper but still very comfortable. And you see these things in China, So the most advanced functions are now asked by Chinese consumers and customers, and that's actually a change. So we'll China be the same when demand comes back.

The consumer is extremely demanding, very high tech driven, loves high tech functions. So you see way more level two plus driving, which is full automated driving, but you are still responsible. So it's a thing which is much cheaper but still very comfortable. And you see these things in China, So the most advanced functions are now asked by Chinese consumers and customers, and that's actually a change. So we'll China be the same when demand comes back.

Definitely not.

Definitely not.

And then the other question I also for you is that you said that this is going to be a very challenging year for you the road ahead, and that obviously where demand is absent than cost cuts need to happen. Are there going to be more cost cuts at BOSH? Where are looking to cut costs? Our jobs on the table, You're going to have to cut some jobs now.

And then the other question I also for you is that you said that this is going to be a very challenging year for you the road ahead, and that obviously where demand is absent than cost cuts need to happen. Are there going to be more cost cuts at BOSH? Where are looking to cut costs? Our jobs on the table, You're going to have to cut some jobs now.

Most important for us are not the cost management questions of our plan. The real core thing of the plan, which includes cost management right is the innovation plans. Because we go for new innovation to face with better value to the consumer in different areas. So we've forced to go more to the US. We forced to go more into new product, new innovation and be on the forefront on these new trends, also in China, also in Europe, but also in the US.

Most important for us are not the cost management questions of our plan. The real core thing of the plan, which includes cost management right is the innovation plans. Because we go for new innovation to face with better value to the consumer in different areas. So we've forced to go more to the US. We forced to go more into new product, new innovation and be on the forefront on these new trends, also in China, also in Europe, but also in the US.

So let's not be totally pessimistic in terms of those new trends. Where is BOSH right now spending the most in R and D? Where are you seeing that sort of promise.

So let's not be totally pessimistic in terms of those new trends. Where is BOSH right now spending the most in R and D? Where are you seeing that sort of promise.

Well, still a lot of money is spent for semiconductors because that's an investment based approach. Right, you need to build these factory first, right, there is one in the US and there are some in Germany.

Well, still a lot of money is spent for semiconductors because that's an investment based approach. Right, you need to build these factory first, right, there is one in the US and there are some in Germany.

We still build. And then there.

We still build. And then there.

Is obviously the electrification story because long term better electric this wild be the way to go. And automation of vehicles, including full automation, but majorly the trend is now not going for full automation, which some players show, but the semi automation, so we.

Is obviously the electrification story because long term better electric this wild be the way to go. And automation of vehicles, including full automation, but majorly the trend is now not going for full automation, which some players show, but the semi automation, so we.

Are still responsible. The card does most of the work. That seems to be the way where the next wave is really coming.

Are still responsible. The card does most of the work. That seems to be the way where the next wave is really coming.

We had a category where you think you could see an acquisition, for example in bat because you said sort of a number of times that you need to be prepared for inorganic growth. Where are you sort of looking at inorganic growth?

We had a category where you think you could see an acquisition, for example in bat because you said sort of a number of times that you need to be prepared for inorganic growth. Where are you sort of looking at inorganic growth?

Well, I think on the inorganic side we are not so much looking at the automotive because the automotive we can do from our own We invest heavily on our own capacities.

Well, I think on the inorganic side we are not so much looking at the automotive because the automotive we can do from our own We invest heavily on our own capacities.

Right, But inorganic growth.

Right, But inorganic growth.

We did this now with the air condition because of the heat pump business, which is also transforming the industry and there in this non automotive side always we are quite active. You saw that also with the building integration where we acted in Canada and the northern US with Paladine. And that's the right way to do it, because this is the moves we need to do to shift more to North America, to shift more to this non automotive businesses. The automotive we are strong enough to shape this ourselves.

We did this now with the air condition because of the heat pump business, which is also transforming the industry and there in this non automotive side always we are quite active. You saw that also with the building integration where we acted in Canada and the northern US with Paladine. And that's the right way to do it, because this is the moves we need to do to shift more to North America, to shift more to this non automotive businesses. The automotive we are strong enough to shape this ourselves.

All right, Well, listen to seven Hart and thank you so much for your time today. I really appreciate really going around the world and around the different industries that BASH is involved in, which is again in half of the world's smartphones and in literally every single car, so a really a very sort of thorough appraisal of sort of demand in the global stage.

All right, Well, listen to seven Hart and thank you so much for your time today. I really appreciate really going around the world and around the different industries that BASH is involved in, which is again in half of the world's smartphones and in literally every single car, so a really a very sort of thorough appraisal of sort of demand in the global stage.