The electronics manufacturing services (EMS) sector in Malaysia has seen mixed performance in 2024 despite being part of the broader tech upcycle, with rising costs, inflation, and supply chain disruptions offsetting growth from increased global demand and outsourcing trends. Key EMS Performances Winners : SKP Resources Bhd (+76% YTD) V.S. Industry Bhd (+47% YTD) NationGate Holdings Bhd (+51% YTD) P.I.E. Industrial Bhd (+29% YTD) Strugglers : ATA IMS Bhd (-8% YTD) JHM Consolidation Bhd (-36% YTD) Growth Drivers and Challenges Diversification Opportunities : The China+1 and Taiwan+1 strategies have positioned Malaysian EMS players to gain market share. However, reliance on major customers, such as Dyson, continues to be a concern. Cost Pressures : High inflation and production costs have affected profit margins. Company Highlights SKP Resources : Recorded a 27% y-o-y net profit increase , benefiting from a recovery in consumer demand. V.S. Indust...
German auto parts giant Robert Bosch will reduce working hours—and consequently pay—for 450 employees in Germany starting March 2024, citing the challenging economic environment.
Details of the Adjustment
- Effective Date: From March 1, 2024, affected employees with 38-40 hour weekly contracts will shift to 35 hours per week.
- Locations Impacted: Primarily in Stuttgart and Gerlingen.
Broader Industry Struggles
- Bosch Chairman Stefan Hartung recently stated that further job cuts beyond the 7,000 announced layoffs could not be ruled out.
- The auto industry, which is central to Germany's economy, faces significant headwinds, including:
- Volkswagen’s Cost-Cutting Efforts: Europe’s largest carmaker is pushing for a 10% pay cut to manage costs, protect profit margins, and counter competition from cheap Chinese imports.
- Declining Demand: Slowing European car sales exacerbate pressures on the industry.
Takeaway: The reductions at Bosch underscore the growing challenges in Germany’s auto sector as companies grapple with economic difficulties and increased global competition. These measures reflect broader concerns about the health of Europe’s largest economy.
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