The privately owned group saw pre-tax profits in 1992 slide 29 per cent to DM1.4bn (pounds 560m), on total sales of DM34bn.
Marcus Bierich, the outgoing chief executive, said he expected turnover this year to fall by around 5 per cent, the first decline since the recession of the mid-Sixties.
He predicted that the group, badly hit by the collapse of the car market, which accounts for more than 50 per cent of Bosch's business, would none the less manage to return a net profit in 1993, though operating earnings would be in the red.
Mr Bierich said Bosch's activities in Britain were performing well and expanding, thanks mainly to the highly efficient performance at the new Cardiff plant, which was still in its run-in phase. The group's car supply businesses saw sales drop 14 per cent in the first five months of this year compared with the same period in 1992. Analysts said this was not too bad in the light of the 20 per cent drop in European car sales.
Emphasising the overriding imperative of cost-cutting, Mr Bierich said: 'We are 25-30 per cent too expensive. We have to get this down in a period of three to five years.' A combination of job cuts and increased efficiency enabled Bosch to increase productivity by 10 per cent in 1992, Mr Bierich said. In Germany, the group had 20,000 workers on short-time work in the first half of the year.
Bosch aims to save at least DM500m this year, half of which will come from cutting back on or scrapping the generous range of fringe benefits for the workforce. The company caused a furore earlier this year when it refused to pay the agreed sectoral 3 per cent wage rise, saying it was being calculated against fringe benefits.
'Many did not like this, but given the structural problems in the industry, we have no choice,' Mr Bierich said.
'Only by reducing costs can we save our existing plants and jobs.'