Betting high on its future-oriented technologies, Continental has realigned its strategy to achieve annual organic growth of around five to eight percent on average in the mid-term.

The company’s realignment strategy is in line with the automotive industry’s transformation and the growing demand for sustainable and emission-free mobility.

Continental group aims at achieving an adjusted EBIT margin between around eight and 11 percent, excluding powertrain technologies.

The newly elevated CEO of the company Nikolai Setzer said the future mobility will be characterised by its high connectivity, safety and convenience, and the software will increasingly make the ‘difference’ in the future. “With our future-oriented technologies and our success-driven, global team, we will be among the winners of the transformation in the mobility industry,” said Setzer.

According to the CEO, Continental’s new strategy will be largely dependent on strengthening the operational performance, differentiating the company’s portfolio with a focus on value creation, and turning the change to connected and sustainable mobility into an opportunity.

“Our strategy is clear, and our mid-term targets have been set,” emphasised Continental CFO Wolfgang Schäfer. “Growth that outpaces our markets and industries, an adjusted EBIT margin of around eight to 11 percent and a return on capital employed of around 15 to 20 percent illustrate our ambitious yet realistic growth path. Besides, with a targeted cash conversion ratio of more than 70 percent, we will further increase our financial strength in the future,” Schäfer said.

As per Setzer, Continental has a unique and robust product portfolio characterised by ‘highly profitable’ and ‘rapidly growing product areas’. In the future, the group will align its product portfolio with its new strategy and its course for value-creating growth. It will thus differentiate its entire portfolio between ‘growth’ and ‘value.’

“Going forward, we will focus on our growth areas and future technologies with even more intensity and resources. This will ensure that we grow faster than the market. At the same time, we will ensure that those products that have already established leading positions in a saturated market environment will remain profitable,” Setzer said. The portfolio strategy also includes possible acquisitions, divestments, and partnerships.

Continental focuses on above-average growth in connected, assisted and autonomous driving, software, new vehicle architectures with high-performance computers; the Tires and ContiTech business in high-growth regions; and digital solutions and services such as those for fleet and industrial customers. In doing so, the group is drawing on its extensive expertise as a software company with more than 20,000 software and IT specialists.

At the same time, the company plans to continue its marketing leading positions in profitable areas such as safety solutions, display and control systems, surface materials and the European passenger-car tyre business, and to secure their value. In this way, it plans to generate sufficient funds for the competitive expansion of its growth areas geared to market and technology leadership.

On the planned spin-off of its powertrain business, Setzer confirmed, “By the end of the year, the necessary organisational conditions will have been created as planned, and the internal processes will have been reorganised. We, therefore, intend to carry out the planned spin-off of Vitesco Technologies as scheduled next year.”

On emission-free vehicles, from 2022, Continental will make its global business for emission-free vehicles carbon-neutral. Continental’s comprehensive roadmap for sustainable business practices aims to achieve 100 percent carbon neutrality, 100 percent emission-free mobility and industry, a 100 percent circular economy and 100 percent responsible value chains – all by no later than 2050.

Competitive Cost Structure

The German technology giant will also focus on cost structure to ensure its future viability and competitiveness to global market conditions. Continental initiated its Transformation 2019–2029 structural programme in 2019 with additional measures to cut costs and increase efficiency. In addition, the company will continue to improve its productivity by increasing automation and digitalisation in its production environment.

Continental will focus on integrated vehicle architectures and increasingly comprehensive software to meet the growing demand for safer, connected and convenient mobility for the Automotive Technologies group sector.

It sees faster organic growth in the mid-term in several automotive growth fields compared with global production volumes of passenger cars and light commercial vehicles (by around three to ten percentage points in each case).

Overall, Continental expects its Automotive Technologies group sector to achieve annual organic growth of around seven to 11 percent, thus exceeding the forecast average market growth of around five to seven percent over the mid-term and by about two to four percentage points annually. The adjusted EBIT margin is expected to be approximately six to eight percent.

Vision 2030 for Tyre Business

Continental’s innovative top performance in the tyre technology will be supplemented by an ever-expanding range of services and aligned even more closely with the various customer segments.

With its new Vision 2030 strategy programme, the company’s tyre business aims to consolidate its position among the world’s top tyre manufacturers.

In the mid-term, Continental’s tyre business aims for an adjusted EBIT margin of around 12 to 16 percent and a return on capital employed (ROCE) of more than 20 percent. Continental intends to increase further its market share in Asia and North America’s growth markets in particular. In the passenger-car tyre segment, the company will further increase business by offering for electric mobility and ultra-high-performance tyres, while the truck and bus tyre business will be expanded with the company’s Conti360 fleet services. The company also see growth for a two-wheeler, racing, industrial, especially in the Agri tyres.

With its service-based digital solutions, the group hopes to become the leading supplier worldwide by 2030. As one of the world’s largest tyre manufacturers and suppliers of electronics, sensors and software for the mobility industry, the company has a decisive competitive advantage here, the company said.

By 2050, for example, the German tyre manufacturer plans to gradually modify its tyre production so that it uses up to 100 percent sustainable materials.

ContiTech

ContiTech intends to grow around three percentage points faster than the market in eight growth areas, where the demand for digital and intelligent solutions are increasing.

ContiTech will explore new business opportunities by combining various materials with electronic components and individual services. Recently, the company has strengthened its plastics expertise in both the industrial and automotive sectors with the acquisition of Merlett in 2019 and the joint venture with aft automotive launched this summer.

Also, the ContiTech business area intends to further increase its value contribution, for example with applications for passenger cars, rail transport, the printing industry and mining. Thus, the business area plans to restore its adjusted EBIT margin to a range of around nine to 11 percent in the mid-term. Its return on capital employed (ROCE) is expected to exceed 20 percent. (MT)

The European Union voted in favour of imposing extra tariffs on China-made EVs by up to 45 percent on 4 October 2024. Threatening a broader trade conflict with a country that has already vowed to protect its companies and is considered as the factory of the world, the move has been criticised by the auto industry and various EU member states.

With growing demand for EU and China resolving their differences through dialogue, the China Council for the Promotion of International Trade is known to express that it is opposed to be the move.

With the technical teams from China and the EU set to resume talks on 7 October 2024, the situation in EU as far as the auto OEMs like Volkswagen Group, Stellantis and BMW Group are concerned, there have been instances of profit warnings.  

Weak demand, rising costs, global competition, trade wars, geopolitical situations, subsidies and company-specific factors are among the reasons being underlined for the profit warnings by European automakers.

Receiving necessary support with 10 members backing the tariffs, 12 abstaining and five members – including Germany – voting against, the European Union, claim sources aware of the development, has been urged by the auto industry to negotiate with China for better terms and conditions rather than to reach the level were a trader war looks eminent.

Present in the China market for a decade or more, many European automakers seem to fear if the tariffs imposed on Chinese EVs will lead to negative consequences in that market for them.

Volkswagen is known to have said that the tariffs are ‘the wrong approach’. There is a need for the two sides to negotiate and find the middle way, mentioned an industry source in Germany in response to the tariffs by EU.

Image courtesy: EmDee (Wikipedia)

The Association of Indian Forging Industry (AIFI), the apex body representing the forging industry in the country has announced its new officer bearers for 2024-26. 

The committee has elected Yash Munot as the new President of AIFI, while S.  Ravishankar was elected as the Vice-President.

Munot, who succeeds Vikas Bajaj, had previously served as Vice-President of AIFI from 2020 to 2024, is now also the youngest to be appointed as the President in the organisation's history. 

He currently serves as the CEO at Varsha Forgings and the Managing Director at KCTR Varsha Automotive. Munot begun his journey in the forging industry in 2005 joining his family business - Varsha Forgings. He was also instrumental in organising major industry events like IFC 2011, Forgetech  India 2016, Asia Forge 2019 and ForgeTech India 2023. He has served as the Western Region Chairman from 2018 to 2020. 

“The forging sector in India is at a pivotal juncture, with tremendous opportunities for innovation and growth. Our focus will be on fostering collaboration within the industry, driving technological advancements and promoting sustainable practices. I am committed to working closely with all stakeholders to ensure that our industry not only thrives domestically but also strengthens and enhances its global footprint. Together, we will build on the strong foundation laid by my predecessors and strive for excellence in every aspect of our work," said Munot.

S Ravishankar added, “I will strive for advancing our industry’s progress and tackling the challenges presented by a rapidly changing global landscape. Our priorities will include boosting competitiveness, driving innovation and equipping our members for future opportunities. I look forward to embracing the exciting prospects ahead and contributing to AIFI’s continued success during this transformative era”

He (Ravishankar) currently serves as the MD at Super Auto Forge and has over 25 years of experience in the auto component manufacturing industry. He is a Manufacturing Engineer with Bachelors degree from Annamalai University and Masters degree from The Ohio State University.

It was in 1997, after working in Detroit for two years, Ravishankar returned to India and joined his family business at Super Auto Forge. He has been instrumental in developing the international business of SAF and led the initiative to establish marketing offices in Detroit in 2001, followed by Belgium in 2011. He has been the Chairman of Indo American Chamber of Commerce for the period 2008 – 2009 – Tamil Nadu Branch and currently serves on the Southern Regional Committee of ACMA since 2021.

Automechanika Frankfurt has cemented its position as the leading international trade fair for the automotive industry with the successful conclusion of Automechanika Frankfurt 2024. 

The slogan of this year’s Automechanika was ‘Driving Transformation’, with topics such as electrification, vehicle connectivity, driver assistance systems and digitalisation taking the centre stage. The fair was held from 10 to 14 September 2024 and saw 4,200 companies from 80 countries displaying their products and solutions for retail, workshops and industry. Spread over an area of 320,000 square metres and 26 hall levels, the event witnessed a total of 108,000 visitors from 172 countries.

Visitors had the chance to see cars with alternative drive systems up close, such as electric, hydrogen, and hybrid models, and even take a ride in the Future Mobility Park and the related expert forum Innovation4Mobility. For even more highlights, there were brand-new event types available, such as an exhilarating rally. Ninety-four percent of attendees, 70 percent of whom were foreign visitors, expressed satisfaction with the event, not just with the trade fair's offerings but also with their aims being met.

An emphasis on sustainable technologies, products and solutions was highlighted at Automechanika this year. Several talks on remanufacturing and circular economy tactics were held on the stage in the new Sustainability Court in Hall 5.0. This year also saw the opening of ‘Ambition’, a dedicated Gen Z section in Hall 3.1 with live acts, panel discussions and succinct, fascinating presentations to pique the interest of young people in the automotive professions. This action was taken as a result of the well-known lack of qualified workers in the automobile sector.

Detlef Braun, Member of the Executive Board of Messe Frankfurt, commented, “Even in the midst of the digital transformation, the industry once again demonstrated its wealth of innovation, providing countless highlights over the course of the five-day event. Together with our exhibitors, we were able to find the right players to present the most important topics – including alternative drive systems, sustainability and the use of AI and robotics in the automotive aftermarket – on the stages and in the exhibition halls. We are also delighted by growing demand from both German and international visitors.”

Michael Johannes, Vice President Mobility & Logistics, Messe Frankfurt, said “Never before has Automechanika in Frankfurt had a supporting programme and range of events like this. Our roster of presentations and practical workshops covered a wide range of topics, including bodywork and paintwork, electric vehicles, commercial vehicles, caravan repair, 3D printing, detailing and much else besides. These were very well received by the professionals, and students and pupils took advantage of the opportunities on offer to find out for themselves what some of the automotive trades and professions are like. One of this year’s new additions was a programme and area devoted especially to Generation Z. We wanted to draw their attention to the professional opportunities that are available in the fascinating world of the automotive industry – and we were very successful.”

Castrol India, a leading lubricant manufacturer, has announced that it has achieved a significant sustainability milestone by increasing recycled content in its high-density polyethylene (HDPE) plastic bottles to 50 percent. 

With this, the company aims to achieve 2,600 metric tonnes of annual recycled plastic usage in its packaging portfolio by 2024.

The step builds upon its previous actions to help make its packaging more sustainable, including the commercialisation of 100 percent recycled bottles for POWER1 range in 2022 and the incorporation of 30 percent recycled content across its entire bottle packaging in 2023.

This latest change aligns seamlessly with Castrol’s global PATH360 strategy, which aims to reduce its plastic footprint by half by 2030.

Sandeep Sangwan, MD, Castrol India said, “We are proud to announce this milestone in our journey towards more sustainable packaging. This achievement is a testament to the hard work and dedication of our team, who have overcome challenges to develop packaging solutions that meet our high standards for quality and aesthetics.”

In addition to packaging, Castrol India aims to have more sustainable manufacturing practices. The company’s production facilities utilise energy-efficient technologies and renewable energy sources to seek to reduce its operational greenhouse gas emissions.