Degenhart: Conti to keep its balance amid high-tech shift

Hanover, Germany – Continental AG will maintain the position of rubber-based businesses within the group even as it moves to become a leading player in the field of autonomous and connected vehicle technologies, according to board chairman Dr Elmar Degenhart.

The German group’s boss spoke to ERJ after a 21 June press conference where senior officials presented new drivetrain, chassis and interior technology advances. Many of these were sensor and software based and aimed at the emerging markets for autonomous or semi-autonomous vehicles.

There was, though, less evidence of a vehicle-of-the-future role for Conti’s Tire and ContiTech divisions - traditional materials-based businesses whose relative significance has declined within the group over recent years.

Despite strong growth within the tires business, for instance, it represented just 26% (€10.7 billion) of overall group sales of €40.5 billion in 2016. This was down from a 29% share five years ago, and 40% back in 2007.

Meanwhile, ContiTech’s share of group sales was 14% (€5.5 billon) in 2016, up from 11% in 2012, but still below the 19% level reached in 2007.

While acknowledging that new automotive technologies now offered higher growth rates and growth potential, Degenhart insisted that Conti would maintain the current business-balance through investment and acquisition in its two rubber group businesses.

“We are investing heavily in tires: in greenfield as well as capacity expansions," he told ERJ. "That is true for North America, Europe and especially Asia. It is not in our interest to let tires as a relative ‘phase’ fall behind. "

“The same is true for ContiTech,” continued the group chairman. “ContiTech is operating now at a level of €6.5 billion and €7.0 billion. We are convinced that over the next five years we can also bring ContiTech up to a level of €10 billion sales.”