Hanover, Germany – Continental Corp. is set to announce a series of cost-cutting measures to lower the impact of a downturn in automotive production, which has been further weakened by the global outbreak of Covid-19 (coronavirus).
The move will be in addition to the German group’s 2019-2029 structural programme, which was announced in September last year, said chief executive officer Elmar Degenhart on 5 March delivering 2019 results.
The measures, which are expected to be announced in May, will target “continuously rising productivity” and “sustainable competitiveness,” said Degenhart without giving further details.
According to Continental, the absolute decrease in the production of passenger cars and light commercial vehicles has reached the level seen in the crisis years of 2008/09 and is being “worsened” with the coronavirus outbreak.
“The uncertainty in the industries that are relevant for us is growing rapidly. An economic recovery will take longer than anticipated,” said the CEO.
Continental said it is therefore looking into how it can “effectively respond to a weakening overall situation and its impact in the medium term.”
The automotive supplier reported a 20% drop in operating profit to €3.2 billion for the year 2019 on flat sales of €44.5 billion.
For the year 2020, the German group said it did not expect a recovery in the global economic environment and anticipates worldwide car production to decline 2-5% year-on-year in 2020.