German car parts supplier Bosch said Friday that it plans to discontinue its solar panel manufacturing business because overcapacity in the industry has caused prices to nosedive.
"Bosch is to discontinue its activities in crystalline photovoltaics," the company announced in a statement.
"Bosch's manufacture of ingots, wafers, cells, and modules will be ceased at beginning of 2014," the statement said.
As far as possible, individual units would be sold quickly and all development and marketing activities were likewise to be ended.
"The module plant in Venissieux, France, is to be sold. Plans to construct a manufacturing facility in Malaysia will be ended," it said.
Furthemore, Bosch would seek a buyer for its Aleo Solar unit.
Bosch employs around 200 people in Venissieux and 850 at Aleo Solar.
"Over the past years, Bosch Solar Energy has tried unsuccessfully to achieve a competitive position. Due to global overcapacity, which has since become huge, nearly the entire industry is sustaining heavy losses," the group noted.
"Despite extensive measures to reduce manufacturing cost over the past year, we were unable to offset the drop in prices, which was as much as 40 percent," said Bosch board member and supervisory board head of Bosch Solar Energy, Stefan Hartung.
In January, Bosch said the losses of the Solar Energy division amounted to some one billion euros ($1.3 billion) last year.
Bosch insisted that it had examined all possible options before reaching this decision, including cost-cutting potential, strategic alignment and 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. We deeply regret this," said Bosch chief executive Volkmar Denner.
Board member Hartung added: "We know full well that associates face a difficult time. Together with the employee representatives, we will search for solutions that are as acceptable as possible."