Continental Predicts Worst Financial Quarter Since World War 2

Matt Posky
by Matt Posky
continental predicts worst financial quarter since world war 2

Parts supplier Continental says the extended lockdown protocols that closed countless automotive factories and dealerships will result in the worst quarter witnessed since the Second World War. It also isn’t overly optimistic about Q3, as supply chain issues will continue making normal business operations difficult while the global recession begins to take hold.

“The second quarter is just behind us. It will be the historically weakest quarter for the auto industry since 1945,” Continental Chief Executive Elmar Degenhart said, according to a transcript of a speech due to be delivered at the company’s annual shareholder meeting on July 14 that was intercepted by Reuters.

Continental plans to cut investment spending by a fifth and has extended credit limits with banks by €3 billion ($3.38 billion USD), according to the document. These and other cost-cutting measures are intended to help the company save roughly €500 million annually by 2023, helping it endure what it seems to think will be an incredibly lean period for the automotive industry.

It doesn’t seem to think Q3 will be quite as bad as Q2, however. Unfortunately, we’ll have to wait until next week to hear all of what Continental has to say on the issue. The above changes are only part of its overall strategy, with staffing reductions seeming highly probable. CEO Elmar Degenhart told German employees not to get overly comfortable and that government help was meaningless in an internal video posted in June.

“We have given up hope that the stimulus packages are effective and good enough to give a short-term boost to car markets. We cannot expect any help from politicians,” he was quoted as saying by WirtschaftsWoche. “At the moment we cannot give any job guarantees. The probability that we will have to talk about layoffs is very, very high.”

[Image: arcticphotoworks/Shutterstock]

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  • ToolGuy ToolGuy on Jul 09, 2020

    My experience with Continental automotive tires has been horrible, but it was some kind of OEM-super-discount-original-equipment-tires deal and was several years back.

  • Jeff S Jeff S on Jul 10, 2020

    @Lou_BC--I use to put Continentals on my motorcycles years ago because of their grip. Never had their car or truck tires.

  • Tassos While Acura was the first Japanese attempt to sell 'luxury' (or "premium") vehicles in the US market, and despite its original good success in the near-luxury segment with the Legend and the far smaller and less expensive Itegra (a glorified Civic), it later lost its momentum and offered a series of underwhelming vehicles. It sure is not a LUXURY maker, and as long as it offers FWD or AWD and NOT RWD vehicles, it will never be taken seriously as a serious sports cars maker. Infiniti is much worse, and if both of them go under, few will notice. Lexus was more successful, offering pimped up TOyotas for 10,000s more, but there is NO vehicle in their lineup, esp now that they scewed up the only serious entry (the LS), that I would care to consider. AND I say all this as a very satisfied owner of 5-speed Honda coupes and hatchbacks (a 1991 Civic hatch and a 1990 Accord Coupe).
  • Mike Beranek Yet another reason to accelerate the transition to electric vehicles charged with energy from wind & solar with modern, non-Monty Burns nuclear as a backup.
  • Tassos The cap the timid Western Europeans agreed to, a HIGH $60, which still lets Putin make a TON of billions of $, was way too HIGH. Ukraine correctly complained about this, it had asked for a $20 cap, I believe.
  • FreedMike "...I wouldn’t recommend holding your breath until fuel prices drop."Regular is $2.87 at my local gas station today. Considering that it was over four bucks this summer, I'd call that a drop. And it happened with the war still going on, the GOP not taking over Congress, Dark Brandon in the White House, and the Theoretical Keystone Pipeline still being canned. Imagine that. And I wonder if poor Slavuta has broken out the "will rap for food" sign yet.
  • THX1136 I would imagine the caps will have minimal impact. Putin is going to do what he wants to do regardless of how the citizens of his country fare.
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