Continental Predicts Worst Financial Quarter Since World War 2

Matt Posky
by Matt Posky

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]

Matt Posky
Matt Posky

A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.

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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.

  • Kwik_Shift_Pro4X Making it even more unaffordable and less desired. See what happens.
  • MaintenanceCosts Has the EU indicated the basis for treating different OEMs differently?
  • Dartman Frankly my dear I don't think about it much. I'm not an insurrectionist, drug dealer, sex offender or criminal of any type. My experience with insurance companies is that once you pass the age of 35 and become a regular bill paying customer with multiple lines of coverage such as auto, home, personal items, EO etc unless you drive like a maniac and have multiple citations, claims etc. you are going to receive the best rate possible and not have to deal with rate hikes and cancellations. I've been with same carrier for 40 years; yes they have made a ton of money insuring me but that's the price of success. They have plenty of information, including personal info that I willingly provided i.e DMV records, physicals for life insurance, home inspections etc. Let's face it, we all subsidize the under 35, poor credit, non-home owning high risk drivers (primarily male). If you fit any of the above, I don't blame you for being paranoid about your "privacy". If you can't do the time, or pay the price, then don't do the crime and think twice. If you are worried about being embarrassed about being caught publicly in a personal moment, don't do it. In the words of your Mother "always wear clean underwear".
  • Zachary I have a Cadillac DeVille 1998 for this car can we make a agreement give me a call 2818613817
  • FreedMike This is a good series of articles. It's well worth your time to check any of your apps to see who's selling your info, and to whom. When it comes to driving, any app that tracks your location is one you need to opt out of sharing with. That includes Google...and after reading this story, I'm opting out of location sharing with MyRadar (which is actually a very useful CarPlay app).
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