Bosch China CEO Reveals: Automakers Profited During Chip Shortage, but Current Price War Slashes Industry Margins

During the automotive chip shortage from 2021 to 2022, China's automotive supply chain maintained relatively sound financial health. Due to factors including the pandemic, Bosch’s order fulfillment rate in China dropped to just 30%–40%, prompting local governments to step in and help coordinate chip supplies. Against this backdrop, automakers prioritized production of high-margin models and avoided price wars, enabling profitability across both upstream and downstream segments of the supply chain. As a result, Bosch achieved record-high revenues globally and in China. In 2023, however, as production capacity rebounded, the new energy vehicle (NEV) sector once again faced overcapacity, plunging the entire industry into a fierce price war. According to disclosed data, the combined profits of all Chinese NEV brands amount to roughly the same level as DJI’s alone, signaling an industry-wide shift toward higher workloads but diminishing returns. Some leading automakers and core suppliers have begun emphasizing the non-automotive aspects of their businesses and are pivoting toward emerging fields such as physical AI. Xu Daquan, President of Bosch China, has personally experienced two major crises in the automotive industry: while working at General Motors’ technical center in Japan in the early 1990s, he witnessed the collapse of Japan’s economic bubble, which forced numerous domestic automakers to sell stakes or undergo mergers; and in 2005, shortly after joining Delphi, he saw the company file for bankruptcy protection in the U.S., followed three years later by General Motors’ bankruptcy restructuring amid the global financial crisis. Xu believes that abandoning the relentless pursuit of scale may be the only way to alleviate industry-wide cutthroat competition—but so far, there are no clear signs of a turning point.