Continental shattered group: hard upheaval for Hanover and jobs!

Continental shattered group: hard upheaval for Hanover and jobs!

Hannover-Vahrenwald, Deutschland - Continental, one of the leading system suppliers worldwide, plans to restructure a comprehensive restructuring, which includes splitting down into three independent companies. This was announced today when corporate management presented its strategy for realignment in an increasingly challenging market environment. The auto delivery business is separated from the parent company, while the Contitech industrial division is probably sold, such as Remszeitung reported.

Tire production remains part of the company. This is a crucial step because the tire business achieves a higher margin than other areas. Experts such as Frank Schwope, Automobil expert, point out that the supplier business has lived through turbulent times in recent years, while automobile manufacturers recorded high profits. The strategy is criticized by Stefan Bratzel, head of the Center of Automotive Management.

restructuring and job cuts

In order to secure the financial stability of the company, the Contitech division, which is about 16 % of the group sales, is to be sold. Comprehensive austerity measures are currently underway, which result in closures in several locations and the loss of tens of thousands of jobs. In particular, five German works from Contitech, including that in Hanover-Vahrenwald, and 7,150 jobs are eliminated in the automotive sector.

Lower Saxony's Minister of Economics Olaf Lies described the situation as a "hard blow" for the employees. Frank Schwope explains that the sale of Contitech is a comprehensible step because this division does not harmonize well with the rest of the company. In the meantime, the newly founded Aumovio division, which emerges from the automotive division, is to go to the stock exchange in September.

Change of course in the core business

Continental also plans a separate stock market noding of its core business, which will consist of the areas of tires and plastic technology as well as the area of ​​contract manufacturing. This strategic decision is expected to be made by the end of the year. Shareholders could be divided into two separate companies, which has potential for significant growth and value creation, according to the management, such as Tagesschau Notice.

With a view to the future, Continental sees a need for more flexibility to keep up with the dynamic market developments. The current financial year shows that the automotive division is currently struggling with weak margins, with an EBITDA margin of less than 5 %, while the profitable tire business achieves an Ebitda margin of a good 18 %.

market situation and competitive pressure

The market development for automotive suppliers shows that German companies are increasingly under pressure in regional comparison. The sales of the top automobile suppliers rose by 20 %last year, but the margins are significantly lower compared to earlier highs, such as a current study by Pwc Strategy & . In addition, Asian suppliers have gained market shares through a focus on future technologies, while German suppliers have lost market shares worldwide since 2019.

The final decision on the split and the future orientation of the company is expected in the fourth quarter of this year, whereby the general meeting must agree. The transaction is planned by the end of 2025 and the steps to split up are currently being prepared. These profound changes illustrate the challenges in front of which Continental and the entire industry face each other in a rapidly changing automotive world.