Transformation is shaping the automotive industry

Martin Peters, challenges have marked the past years. Did this continue in 2023?

Yes, and these remain complex in a time characterized by crises and, unfortunately, wars. Several sales markets recorded declines, and high costs for energy and raw materials weighed on the result. Other markets opened up opportunities for growth, and products related to the combustion engine continue to be in high demand in these markets. The transformation progressed, but demand for e-mobility products in Europe was significantly weaker than expected.

How is this reflected in the business figures?

We were able to develop our net sales more positively than planned to around three billion euros. The increase of approximately ten percent proves that we have the right products. At the same time, cost increases and inflation had to be compensated for, which required consistent action management. However, the sum of these factors, combined with the overall decline in demand across the industry in the second half of the year, reduced our positive EBIT.

What was the year like in the different regions?

Customers around the world value us as a reliable partner. The technology in the area of increasingly clean classic drives opens up opportunities for us in Asia, particularly in Thailand and Malaysia as well as China. We are developing these with new plants, together with our joint venture partner Aapico Hitech. We have won important customer orders in the USA and expect further growth. However, we had to learn the hard way in 2023 due to an extremely rapid ramp-up and are continuing to work on our operational excellence. In Europe, we are successful at a very high level with our traditional technologies. This will not decline today or tomorrow, but with a view to 2035. This requires flexibility, as the speed of transformation depends on the market and customer requirements.

Is e-mobility the future?

E-mobility is coming—and we already have an important component on the market with our high-voltage heating systems. As a pioneer, we presented this product 15 years ago, and today there are over ten million vehicles with our technology on the roads worldwide. It could be even more, because contrary to our plans, we recorded lower call-offs last year and therefore significantly lower sales—to put it simply: our customers in Europe sold fewer e-cars than expected.

And what about automotive electronics?

As we also supply the electronics for the heaters mentioned above, we were doubly affected by the weak demand. Independently of this, we took an important step last year with the development of a series component, the battery management system (BMS) of a leading vehicle manufacturer. Intensive work and coordination with the customer led to success. Eberspächer is one of the first companies in Europe to have a BMS in the low-voltage range with a connection to the vehicle’s electrical network in series production. The Business Unit Automotive Electronics is thus opening up a completely new product segment. Product innovations in the field of bus air conditioning and thermal management for special markets are also very promising.

Important future products—and part of the strategy?

Exactly—these offer excellent prospects and are an important part of our MOVE corporate strategy, which we developed further in 2023. In addition to Clean Mobility, Smart Solutions, and Dedicated People, it now contains a fourth mainstay: Profitability and Growth. This gives more prominence to an aspect that was already part of the strategy. We also extended the time horizon of our targets to the year 2030. And the issue of sustainability concerns us as a company just as much as it does each and every one of us. In order to do justice to this, sustainability is an integral part of our strategy, combined with the goal of becoming a CO₂-neutral company by 2040.

Speaking about sustainability: What's next for hydrogen and fuel cell systems?

I am convinced that we can continue to successfully shape our transformation with technologies on these topics and tap into attractive potential in the medium term. Close to our core competencies, we are developing new solutions with exhaust systems for the hydrogen combustion engine as well as components for the efficient operation of hydrogen fuel cells, the so-called “balance of plant.” In addition to our series products, the air compressors for fuel cell systems, we are developing new solutions in connection with the production of hydrogen.

How do you involve your employees in this diverse transformation journey?

It is up to us as a management team and the respective managers to explain our clear goal for the mobility of tomorrow. To this end, we promote exchange and feedback across all levels. Because it is our dedicated people around the world who are helping to shape this journey. This is exactly what our approximately 11,200 employees did with great commitment last year—and I would like to thank them all for this!

Looking ahead—what are your expectations for the current fiscal year?

2024 will continue to be very challenging for the entire automotive industry. We do not expect the situation on the market to ease in the coming months. We continue to work consistently on our competitiveness. Resilience and speed are the success factors here. We need to bring products to market faster and become more resilient in dealing with external influences. What is particularly important to me: We are ready for the future with the right product portfolio for every type of drive. This enables us to be successful in all regions under changing market conditions.