Due to a sharp decline in demand for gasoline and diesel cars, Continental is significantly reducing its investments in the areas where it is manufactured. According to one of the world's largest car suppliers, the board has decided that the business of producing fuel injectors and pumps, among other things, should no longer extend to internal combustion engines. Instead, in the future, much of the attention and investment will go to the parts needed for electric cars.
"The future is electric, we are convinced" Said Andreas Wolf, Continental's powerful delivery manager. Otherwise, the division will be reorganized under the name Vitesco Technologies.
The announcement was made when Continental's Q2 results were announced. These support the need for a turnaround, as after-tax profit fell 41 percent (to EUR 485 million) and sales fell 1 percent to EUR 11.3 billion. The group is responsible for the weak performance in the global automotive industry.
Andreas Wolf pointed out that although the car industry will of course not be phased out of internal combustion engines for a long time, it is increasingly difficult to justify the high cost of developing components that help reduce the amount of pollutants in the exhaust.
Interestingly, that's exactly the opposite of what Bosch's board chairman said in an interview on Tuesday. Volkmar Denner reports that the company anticipates that the proportion of internal combustion engines in the new car market will still be 75 percent by 2030, which is why Bosch has to continue working to improve the efficiency of internal combustion engines and thus reduce environmental impact. reduction.
Of course, it is more important for Bosch's 13,000 Hungarian employees that the group is preparing for layoffs, but the details are still unknown. Continental is a similarly strong player in the Hungarian automotive industry, with seven factories, one tire shop, a logistics center and an artificial intelligence development center. Together with the employed workforce, it employs more than eight thousand workers, most in Veszprém.
So it is no exaggeration to say that the decisions of the two German company groups, which employ a total of 21,000 people, are also transforming the Hungarian automotive industry, and a significant part of their remaining employees will manufacture and develop something other than before.
According to the Wall Street Journal, Continental has essentially abandoned its internal combustion engines, as its companies will gradually become incompetent without further development. Similar suppliers need to carefully consider what they are investing in their R&D resources, which are more modest than before due to the decline in car sales.
Changes in regulation, at least in Europe, mean that manufacturers are increasingly turning to electric and hybrid models, as this is the only way to satisfy the ever-tightening carbon footprint. Of course, providers also need to adapt to this.
Automotive consultancy AlixPartners forecasts that the combined market share of cars and diesel cars worldwide will drop from 56 percent last year to 56 percent by 2030, and Europe will lead the way with a 42 percent drop in new car sales.