March 22 (Bloomberg) -- Robert Bosch GmbH, the biggest car-parts maker, abandoned a near $2.6 billion foray into solar-power equipment just days after the industry’s biggest corporate collapse as a global production glut led to slumping prices.
The Stuttgart-based company will stop making solar ingots, wafers, cells and panels early next year and try to sell assets “as soon as possible,” Chief Executive Officer Volkmar Denner said, as Bosch cannot see a way to restore its competitiveness. The company’s solar division employs about 3,000 people.
The decision, in the week Suntech Power Holdings Co. began bankruptcy proceedings, underscores how a flood of output backed by Chinese state banks has eviscerated the industry’s ability to generate returns. The collapse of Solyndra LLC in 2011 was followed by bankruptcies of solar companies including Q-Cells SE, previously the biggest photovoltaic cell producer.
Solar panel prices fell by half in 2011 and dropped another 24 percent last year, hurting Bosch and its peer Solarworld AG.
“The solar industry consolidation continues, and is far from over,” Jenny Chase, a Bloomberg New Energy Finance solar analyst, said by e-mail. While component prices are beginning to pick up in early 2013, and the possibility of imposing import tariffs may add to those gains, “it’s unlikely that this would be enough to put Bosch’s solar production back in the black.”
The company had been reviewing its solar unit since last year and in January posted 1.05 billion euros of charges and losses from the operations. It plans to sell a 90.7 percent stake in Aleo Solar AG and a module plant in Venissieux, France. It has scrapped plans to build a factory in Malaysia.
“We have considered the latest technological advances, cost-reduction potential, and strategic alignment,” Denner said in a statement. “There have also been talks with potential partners. However, none of these possibilities resulted in a solution for the Solar Energy division that would be economically viable over the long term.”
Bosch will for now keep developing solar thin-film technology at Bosch Solar CISTech GmbH in Brandenburg.
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