You’re relatively new in this role. Previously, you were boss of Bosch in South Africa and other sub-Saharan African countries. What was that experience like?
It covered an area south of the equator, from Kenya to South Africa. It was 24 countries altogether. It was complex, with many different countries with different colonial histories. Bosch has had a presence in South Africa since 1906. But relatively speaking, our involvement in Africa is new.
South Africa must be a more prosperous market.
It depends on how you define it. If you look at the economic figures for South Africa, you get the impression that it is an emerging market. What is typical in South Africa is this divide: one-third of the population is in the First World. It’s a slight exaggeration, but the remaining two-thirds do not even participate in the economy. Of the sectors there, automotive has the longest history for us. There is also power tools – similar businesses to those we have in other parts of the world.
What do you think the main challenges are for global automotive suppliers?
Historically, the automobile relies on an internal combustion engine and a mechanical drivetrain. It is changing quite a bit, because we have this trend of electrification and plug-in hybrids and electric vehicles. And then there is the other trend, towards autonomous driving, which is enabled by sensor technology.
Both of those trends are happening in a short space of time. It opens up the industry to companies that were not formerly part of the industry. And there are a lot of opportunities for us. The global car industry is growing. But the competition is tough.
What made you want to work in Britain?
The UK is now the number-two economy in Europe after Germany. The two countries are becoming more alike, politically and economically. The UK is still growing in population. In a few decades, they might be of similar size. The market is getting bigger. Britain is now a bigger market for us than France, and number four in the world.
Clean up: Domestic appliances such as washing machines are still a big part of Bosch’s market
What are the biggest areas of business for Bosch in Britain?
We still have a strong automotive business here, both in original equipment and in the aftermarket. We are impressed at the way in which the automotive industry is developing. Last year,
1.6 million vehicles were produced, the largest number in many years. In 2015, we expect further growth to 1.8 million. Around 60% of our business globally is automotive.
In the UK, it is a bit lower, 45%. Fifty-five per cent is to do with manufacturing in non-automotive areas – consumer goods, home appliances and power tools, and energy and building. We have a plant in Glenrothes, north of Edinburgh, where we do hydraulic drives for construction machines. The London Eye uses them, too. We have the complete spectrum in terms of Bosch products in Britain.
Bosch has a unique culture. How have those values had an impact on your own career?
It is a conglomerate. That is not very fashionable nowadays. If we were a stock-listed company, the analysts and the banks would probably have forced us to focus more. But we are good at creating crossovers between different divisions.
We have a new domestic oven with an oxygen sensor inside. It is a technology that comes out of the automotive industry, from exhaust gas treatment. It feeds back to the engine control unit so you can make the engine more efficient. In the oven, it measures the humidity level – to stop you burning cakes. When you burn something in the oven, it is to do with humidity being too low. This prevents that.
The long-term investment that can be needed in automotive can be more easily done in companies that are not stock-listed. You can give yourselves more time. That does not mean that strict results do not have to be achieved. But the investment in automotive is 10% of turnover at Bosch. Last year, we invested €5 billion in R&D globally.
Making it big: Hoffmann foresees a bright future ahead for Europe’s manufacturers
You feed back into local communities more widely than just into the Bosch workforce in Germany. Is that something you would like to replicate in Britain?
This has two aspects. One is corporate social responsibility in the wider sense. We try to be a good citizen – wherever we are in the world. We try to look at the communities.
The other aspect is our constitution: 92% of the company is owned by a foundation. It receives the bulk of our profits, and these profits go to charity, and all sorts of different things.
There are a few hospitals that rely on donations from the foundation. We give scholarships. We try to bring people together, and researchers from various countries and cultures.
That is an aspect of working for Bosch that is important – at least for me. In my view, that is separate from corporate social responsibility – it is to do with the ownership structure of the company. It is not a public relations exercise.
What we want to achieve for Bosch in the UK is growth. The mature markets that we have in Europe, if you look at what the financial crisis has done, can only preserve jobs when there is a certain level of growth.
That means organic growth, as well as growth through acquisitions. We will consider manufacturing acquisitions in the UK if the right deal emerges.
What is your view of the problems in the Eurozone now?
This is just a personal view, but I think we have been too reliant on debt for far too long. Now we are like a drug addict that needs to go cold turkey – as a society and as a country. There are a lot of complaints now from some countries that the German government and the European Central Bank are too ideological, and focusing only on austerity.
But there are good examples of a few countries that have gone through this period of austerity and are doing well. Europe has a lot to offer. We have good education systems and creative people, and, as a continent, we still have a strong engineering and manufacturing base, in countries such as in Italy as well as Germany. All the ingredients are there for a bright future.
Career in brief: Steffen Hoffmann – a world of experience
• 1992: Management trainee, Blaichach Plant, Robert Bosch, Immenstadt, Germany.
• 1993: Section manager controlling, Nippon ABS (a joint venture between Bosch and Nippon Air Brake), Yokosuka, Japan.
• 1996: Department manager, accounting and finance, Bosch Telecom, Frankfurt, Germany.
• 1999: Department manager corporate planning, Bosch Corporation, Tokyo, Japan.
• 2002: Senior vice-president of finance and administration, diesel and gasoline division, Bosch Corporation, Tokyo, Japan.
• 2005: Plant manager, Hildesheim, Germany.
• 2009: Managing director, Robert Bosch, Midrand, South Africa.
• 2015: President, Robert Bosch, UK.