Bosch's Indian unit begins restructuring as auto sector slowdown bites
BENGALURU (Reuters) - India-listed manufacturer Bosch Ltd
Bosch, the latest firm to flag weak conditions in the Indian auto market, said its automotive sales dived 17.5% in the June quarter.
The outlook for the auto industry was "extremely" challenging, Managing Director Soumitra Bhattacharya said in a statement.
Bosch, which makes a wide range of auto products including braking systems and batteries, is the latest firm to restructure its business or limit production due to the slowdown, which has been exacerbated in recent months by a liquidity crunch in India's shadow banking sector.
Automakers Tata Motors Ltd (OTC: TAMO) and Mahindra and Mahindra Ltd (M&M)
Earlier on Tuesday, an auto industry body said India's domestic passenger vehicle sales in July had fallen at the steepest pace in nearly two decades.
Bosch has earmarked 820 million rupees ($11.5 million) as a provision for restructuring, which would include "manpower adjustments," it said.
"The slowdown is not cyclical, but structural," Bhattacharya said. "Necessary course correction measures will be taken in order to remain competitive."
Shares in Bosch's Indian unit dropped 3.4% following the news of restructuring. The company's profit in the three months ended June dived 35% to 2.8 billion rupees, while revenue from operations dropped 13.5% to 27.79 billion rupees.
($1 = 71.2450 Indian rupees)
(Reporting by Sachin Ravikumar, Editing by Sherry Jacob-Phillips)