German Auto Supplier Continental Considers Sale of Car Division

German auto supplier Continental is exploring the possibility of selling its car division currently bundled within ContiTech, according to a report from Manager Magazin. The potential sale is part of a broader reorganization plan being developed by the company’s Supervisory Board Chairman and executive board. Continental has been taking steps to restructure and improve profitability as its market capitalization has significantly declined in recent years.

Reorganization Plans for Continental

In February, Continental announced the reorganization of ContiTech, consolidating it into three divisions across Europe, the Americas, and Asia Pacific. The car activities of the company were also grouped into a separate unit focused on electromobility. Manager Magazin reports that this unit, which specializes in belts and sealing systems and generates over 2 billion euros in revenue, is expected to be separated from the business within two years. The unit could be sold, further divided, or merged with another company.

Continental intends to retain the highly profitable tires business and non-automotive part of ContiTech as its core going forward. However, an unnamed top manager warned of a potential workforce rift if the tires business continues to finance the car division.

Continental’s Response and Future Plans

Continental declined to comment on the report. In May, the company stated that ContiTech would be realigned to enhance its impact and efficiency, without providing further details. Continental currently ranks No. 9 on the Automotive News list of the top 100 global suppliers, with sales of $25.4 billion to automakers in 2022.