Continental Reports Losses, Keeps Objectives Firmly in Sight
NOGALES, SONORA, MX – The company Continental, which will close its Nogales, Sonora facility, where 2,000 people are employed, reported losses during the second quarter of 2020.
Related news: Continental Corporation in Nogales Closing in the Next Three Years
In a press release, Continental considers the current period as the lowest point of the worst crisis experienced in the automotive industry since the end of World War 2.
Dr. Elmar Degenhart, CEO of the company, details in a statement that as a result of the temporary closure of the plants due to the Coronavirus pandemic, the production figures for the second quarter in Europe and North America were very weak. “With 2.0 million units (-63%) and 1.3 million units (-69), respectively,” he stated.
The Company Keeps Their Objectives Firmly in Sight
“Our tough cost-cutting measures are having a rapid and remarkable effect,” he said. One of them is to reduce fixed cash costs by more than 5% and capital expenditures by more than 25%.
“In recent years, we have constantly strengthened our business with industrial and end customers. This makes us less susceptible to the ups and downs of the auto industry,” he explained.
The executive added that Continental’s business with industrial and end customers fell 23% in the second quarter, demonstrating that it is substantially stronger than global vehicle production, which fell 45% in the same period.
He added that since the beginning of June, all Continental plants worldwide have resumed production.
However, life in some regions is still restricted by the Coronavirus pandemic, and some plants are being utilized at greatly reduced capacity levels in line with substantially lower global demand.
Depending on how the pandemic develops and its consequences, the company may have to make temporary adjustments to production at certain plants again, he says.
Related news: Nogales Seeks to Keep Continental Industry Open
Today, around 25% of all employees work reduced hours worldwide. In Germany, about 30,000 employees worked an average of five days less in June.
The report shows that global automotive production in the second quarter fell by 45%, while organic growth was less than 40%, registering 6.6 billion euros against the 11.3 billion recorded in the second quarter but of 2019.
In contrast, production in China increased 9% year-on-year thanks to government subsidy programs with 5.9 million passenger cars and light commercial vehicles.
The Company Bets on Technology
Last week, the company announced that since the early 2020s, it has been making progress in developing future technologies with a “supercomputer” that is unrivaled in the automotive industry.
From this new group of computers, developers at Continental locations around the world get the computing power and storage they need for highly complex, data-intensive developments, including in particular those related to artificial intelligence.
“This is necessary for the development of future pioneering technologies in assisted, automated and autonomous driving,” he adds.
Continental is thus accelerating its development, which it leads in terms of technology, while underlining its core competencies in software and networking, as well as in systems architecture.
“Software is the oxygen of the industry, and we expect it to deliver tremendous profitable growth in the future. The reason is that there will be more and more functions in the vehicle, ’’ the CEO says.
