Continental AG Expects Slight Increase in 2013 image

Continental AG, the German car parts supplier, expects growth in its car and van business next year.

“Europe will stagnate at its current relatively low level. The trough should have been reached more or less. Maybe there will still be a decline of 1 to 2 percentage points,” Financial Times Deutschland quoted CEO Elmar Degenhart saying.

The company plans to make up for the loss in Europe, by focusing on Asia and North America markets. Even if the company’s business gets more difficult by the quarter this year, Continental expects to see its sales increase 7% by the end of 2012 to more than 32.5 billion euro.

In August, Continental expanded its overseas auto operations after it bought Parker Hannifin’s automotive air-conditioning business. ContiTech unit announced the acquisition on August 13th, together with the addition of 1,000 employees at five of the US based company plants in Mexico, China, the Czech Republic and South Korea.

Parker Hannifin’s air-conditioning unit provides profits of $140 million annually and manufactures containment components and refrigerant control for light truck and passenger car air conditioning applications. The air-conditioning unit will now be part of ContiTech’s Fluid Technology Business Unit.

  • Peter Diamond

    This is exactly what the smart companies are doing, with Continental building/opening a new infotech factory in China and a new technical centre in Brazil to name but two. I notice also that Continental's largest single shareholder the Schaeffler Group have also tripled their investments in their 14 Asian factories. It's going to take some time for Europe to sort itself out, but I have no doubt that these companies will continue to do well operating globally as they do.

  • Hackenson

    The business growth in Asia and NA is a certain, and yet the forecast has been increased by 2% from 5% which I have read online last month. Main shareholder Schaeffler should have made some new business connection for Continental after announcing the suppliers award a few days ago. I have not seen any news about Continental taking over Parker Hannifin last month, it was indeed a good decision because the business at Parker Hannifin should be needing parts from Schaeffler, while Schaeffler can custom made the parts for Parker Hannifin and Parker Hannifin can purchase part in a better price, it will be a dual win situation.

  • Matt H.

    Tough times in world economy will come and go- that is natural. And, the performance of great companies in times like these keep them floating and distinguishes them from others. Continental moved carefully, expanded with caution and maintained steady growth. Diversification and agility helped this company perform well. When Shaeffler sold some part of its holding, the price took a hit, but it bounced back. Continental has shown its strength by returning to DAX index.

  • jeepaul

    Schaeffler has sold around 10% stakes of Continental in Sep. However, this action didn't harm both parties but gain for both parties. Schaeffler group has made profit on the sold, has more cash flow on hand and the number of Continental stock would be circulated in the stock market. It makes more people could trade her stocks.
    As we can see, Continental's stock price didn't fall dramatically. It keeps steady and expects growth because as mentioned in this passage, Continental expects growth in demand not only this year but also in 2013