German technology company Continental has announced that around 3,000 research & development (R&D) jobs worldwide are set to be impacted by end-2026. The move is part of the company’s continued optimisation drive for its global R&D network locations, which also focusses on streamlining processes that enable accelerated adaptation to customer needs.

Philipp von Hirschheydt, member of the Continental Executive Board and head of the Automotive group sector, said, “Offering forward-looking technology is critical to our business. We will continue to invest substantially in research and development for new products and systems. At the same time, we are continuously improving our competitive strengths in the interest of our sustainable market success. As a result, we will ensure our R&D team is one of the most efficient in the world market and secure attractive jobs for the long term.”

One of the factors, which seems to have influenced the move is the automotive slowdown being witnessed in several markets including Germany.

Continental stated that in response to shifting customer demand and the need for greater operational efficiency, it is implementing a series of targeted measures across its business segments, subsidiaries and global locations. The idea is to optimise capacity, enhance the effectiveness of its R&D network and improve overall processes.

In Germany, the primary impact of these measures will be felt at the Babenhausen site, where approximately 12 percent of employees are expected to be affected, and in Frankfurt, where around 5 percent of positions are involved. Additional, albeit smaller-scale, efficiency adjustments are planned for locations in Ingolstadt, Regensburg and Schwalbach.

Furthermore, company's subsidiaries, Elektrobit and Continental Engineering Services, will also undergo restructuring. Elektrobit is set to reduce 480 jobs globally, with approximately 330 of those in Germany. Similarly, Continental Engineering Services will be affected by workforce adjustments impacting 420 positions worldwide, including around 330 in Germany. As part of a broader global location strategy, the company also plans to exit its Nuremberg site.

At present, Continental’s Automotive sector employs around 92,000 people, including 31,000 in R&D as of 31 December 2024.

The German company has shared that the reduction will be done through planned measures as socially responsible as possible. A significant part of the R&D workforce optimisation efforts will be by not positions that become vacant due to natural attrition.

Image for representational purpose only.

The Indian automotive components industry, which is a critical partner for the domestic as well as the global automotive industry is expected to grow by 8-10 percent in FY2026 according to ICRA.

The estimates are based on the company’s assessment of about 46 auto ancillaries with aggregate annual revenue of over INR 3,000 billion in FY2024, which accounted for about 50 percent of the industry.

For FY2025, the industry is expected to report 7-9 percent growth, with operating margines to be around 11-12 percent for FY2025 and FY2026. The confidence comes on the back of the industry benefitting from operating leverage, higher content per vehicle and value addition while remaining vulnerable to any significant unfavourable movements in commodity prices and foreign exchange rates.

The study stated that the ‘disruption along the Red Sea route has resulted in a surge in ocean freight rates by 2-3 times in CY2024 compared to CY2023. Any further sharp and sustained increase in ocean freight rates could also have a bearing on margins for auto component suppliers having significant exports/imports.’

In FY2026, ICRA estimates that the auto component sector will pump in INR 250-350 billion investment towards enhancing capacity, localisation/capability development and new technologies (including EVs) among others.

The big opportunity in EV segment can be seen on the fact that at present only 30-40 percent of the supply chain in India is localised, which includes traction motors, control units and BMS. On the other hand, EV battery cells that make up for almost 30-40 percent of an EV cost continues to be imported.

Vinutaa S, Vice President and Sector Head – Corporate Ratings, ICRA, said: "The domestic auto component industry is in a transitory phase with the automotive players increasingly focusing on sustainability, innovation and global competitiveness. Demand from domestic original equipment manufacturers (OEMs), which constitutes over half of the industry revenues, is estimated to grow by 7-9 percent in FY2025 and 8-10 percent in FY2026. Part of the growth would stem from premiumisation of components and higher value addition. Growth in replacement demand is pegged at 5-7 percent in FY2025 and 7-9 percent in FY2026, driven by increase in vehicle parc, higher average age of vehicles/used car purchases, preventive maintenance and growth in organised spare parts, among other reasons.”

“Exports, which account for close to 30 percent of the industry’s revenues, are likely to be impacted by subdued vehicle registration growth in the target markets. However, factors like rising supplies to new platforms because of vendor diversification initiatives by global OEMs/Tier-Is and higher value addition, partly stemming from increase in outsourcing, augur well for Indian auto component suppliers.”

Metal Castings & Forgings

ICRA finds that Indian component suppliers in the metal castings and forgings also have a bigger opportunity on the back of plants closure in European Union on the back of viability issues.

The report stated that ‘ageing of vehicles and sale of more used vehicles in global markets would aid in exports for the replacement segment. The impact of any import tariffs on Indian auto component exports remains monitorable.’

In the medium-to-long term, premiumisation, localisation, EVs and stringent regulatory norms continue to offer tailwind for the Indian automotive industry.

“ICRA’s interaction with large auto component suppliers indicates that the industry is estimated to spend INR 150-200 billion in FY2025 and another INR 250-300 billion in FY2026. The incremental investments would be made towards new products, product development for committed platforms and development of advanced technology and EV components, apart from capex for capacity enhancements and upcoming regulatory changes. R&D, though, is still at an average of 1-3 percent of operating income, significantly lower than the global counterparts. ICRA expects auto ancillaries’ capex to hover around 7-8 percent of operating income over the medium term, with the PLI scheme also contributing to incremental capex towards advanced technology and EV components,” he concluded.

Representational Image courtesy: Ronaldo Galeano/Pexels 

German automotive parts supplier Mahle has won its first series order for a new, high-performance cooling module in the megawatt charging sector.

The module will be used in fast-charging stations for e-commercial vehicles, which typically are installed on service stations on and off-highways. They can operate in varied temperatures and can generate waste heat of up to 8 kilowatts (kW). Rapid-charging for e-CVs capacities of up to 3.75 megawatts (MW) per charging station are now possible.

Mahle said a European cable manufacturer customer and outfitter of megawatt charging systems (MCS) particularly rated the performance and cost efficiency of the cooling module as crucial factors in placing the order.

“With this innovative cooling module, Mahle is expanding its product portfolio for intelligent charging solutions and setting new standards in the charging infrastructure for electric trucks and electric heavy-duty vehicles,” said Christian Kuechlin, Vice-President Mahle Industrial Thermal Systems.

The series production for the cooling module will start by end-2025 at Mahle’s facility in Namestovo, Slovakia.

The company explained that the modular cooling module can also be used in fast-charging systems for passenger cars and light commercial vehicles, in maritime applications or for rail vehicles. The cooling module can be adapted to the installation space of different charging stations and can operate in temperatures ranging from -35 degrees Celsius to +50 degrees Celsius.

Tier 1 supplier Uno Minda has further strengthened its lighting business with onboarding Todd Morgan as the Global Head of Lighting Technologies and Innovation.

Morgan comes with over three decades of experience in the automotive lighting industry. He has held various manufacturing and product development roles, and till recently he was the Chief Technology & Innovation Officer at Lumax DK Jain Group.

In his past roles, he has worked with Ford Motor Co, Visteon and Varroc, working across geographies including USA, Japan, France and the Czech Republic.

The appointment comes at a time, when Uno Minda Group is looking to expand its product offerings in the automotive space, especially banking on the PACE (personalisation, autonomous, connected and electric) megatrend.

Pune-headquartered auto component supplier Kinetic Engineering has appointed Vinayak Jayaram Shevade as its new Chief Financial Officer (CFO).

He will be responsible for driving the company’s financial strategy amid its ambitious expansion plans. It was recently that Kinetic Engineering had outlined its INR 1.77 billion investment plans towards enhancing working capital, expanding manufacturing capabilities and accelerating the development of electric vehicle components. The company has an ambition to attain INR 10 billion in revenue by 2029.

Shevade is a Chartered Accountant and Commerce graduate from Mumbai University, and had previously held key leadership roles at Kinetic Honda Motor, Mahindra Two Wheelers and Kinetic Engineering.

"I am honoured to take on this role at KEL, a company with a strong legacy of innovation and excellence. I look forward to contributing to its financial strength and supporting its ambitious growth plans. My goal over the next two years is to strengthen the company’s financial position by driving higher turnover, improving EBITDA & net profit and optimising financial leverage. I look forward to contributing to KEL’s growth journey and long-term success,"said Shevade.

Ajinkya Firodia, Vice Chairman and Managing Director, Kinetic Engineering, said, “Vinayak’s deep financial expertise and leadership will be instrumental in driving KEL’s strategic objectives. We are confident his experience will help propel the company’s continued success.”