Europe’s auto industry is too dependent on other regions, says Bosch chairman

A worker at the Volkswagen assembly line in Wolfsburg, Germany, April 27, 2020. Swen Pfoertner/Pool via REUTERS

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FRANKFURT, Dec 11 (Reuters) – Europe’s auto sector has become overly dependent on Asia and other regions for vital components such as semiconductors and battery cells, Bosch’s outgoing chairman (ROBG) said .UL) to a German newspaper.

Automotive chips and battery cells have become the two most important components in the age of electric and autonomous vehicles, forcing European automakers to rely on Asian suppliers as the local industry has been slow to strengthen its capacities nearby.

“Yes, we have become too dependent on other regions, and a change of course is necessary,” Bosch supervisory board chairman Franz Fehrenbach, who is stepping down at the end of the year, told the Frankfurter Allgemeine Zeitung.

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“However, it is not the fault of politics, but it is related to cost optimization in the supply chain,” he said. “The automotive industry is slowly wondering what the supply of raw materials will look like, especially for battery cells.”

German companies have outlined plans to reclaim control, including Volkswagen (VOWG_p.DE) which plans to build six major battery cell factories with partners in Europe by 2030.

A global shortage of automotive chips has highlighted the problem, forcing the European Union to launch subsidy programs to lure chipmakers to the continent.

Bosch, the world’s largest auto supplier, opened a billion euro ($1.1 billion) chip factory in Germany this year, its biggest investment ever, as it claims to equip latest electric and self-driving cars. Read more

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Reporting by Christoph Steitz; Editing by Edmund Blair

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