Continental AG Issues Dire Outlook as Coronavirus Hits Auto Industry
05 März 2020 - 12:23PM
Dow Jones News
By William Boston
BERLIN--Continental AG, which supplies auto makers with
components from tires to computers for self-driving cars, provided
a dire outlook for an industry that is caught in the grip of the
coronavirus and a deteriorating global economy.
The Hanover-based company, which operates around 50 factories
and research facilities in China, said Thursday that in light of
the impact of the coronavirus it would step up cost-cutting
measures and increased planned savings beyond the annual
500-million euro ($557 million) target it had set for 2023 as part
of a longer term shift from parts for conventional gas-powered cars
to electric cars.
The auto industry was expected to produce around 85 million cars
and light trucks this year, well off the peak of around 95 million
vehicles in 2017, as the weakening of global demand accelerates in
the wake of the coronavirus.
"That means we are dealing with 10 million fewer vehicles,"
Continental CEO Elmar Degenhardt told reporters, "and we will have
to adjust accordingly."
Continental, which swung to a loss before interest and taxes of
EUR268 million in 2019 as a result of restructuring charges, said
sales this year could fall nearly 5% to EUR42.5 billion and its
pretax profit margin would fall to between 5.5% and 6.5% from more
than 9% in 2018.
Write to William Boston at william.boston@wsj.com
(END) Dow Jones Newswires
March 05, 2020 06:08 ET (11:08 GMT)
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