Continental changes course to electric
The giant automotive supplier Continental is changing course. The company saw an important regress in its financial results and will now focus on electrification.
The whole automotive industry is getting under pressure, and the suppliers of those car manufacturers are feeling the heat too. Yesterday we talked about Bosch having to license people because of dwindling demand for diesel cars. Today, it’s Continental that is suffering under the receding demand for conventional internal combustion engines (ICE).
Not only tires
Most people think of Continental as one of the biggest tire manufacturers in the world. But it’s more than that. It also supplies thousands of parts for ICE engines and emission measuring and controlling instruments, for example.
Now the top of the company sees that the entire car industry is getting in heavy weather because the most important markets (China, US, and Europe) are not doing so well. The Continental managers don’t see an amelioration in the short term.
In the first half of 2019, Continental could still register a benefit of 485 million euros. But a year ago, this was still 822 million, and the total turnover receded to 11,3 billion euros.
That’s why the company is now changing course. Its division that produces hydraulic components (injectors, pumps for ICE engines) will not be expanded anymore. The emission treatment technology for the same engines will also be held against the light.
In exchange, the focus will be put on electrification technology — not only the engines and the batteries but the whole environment around it. And, of course, tires for electric vehicles have specific needs, focusing on rolling resistance, for example.
The plan to develop and build its own ‘solid-state’ high tech battery factory is shelved temporarily. Continental will first concentrate on the other parts of the transition to electrification.