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January 16, 2018 01:00 AM

Continental CEO: Free, open international trade critical to auto industry

Bruce Davis
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    Bruce Davis, Tire Business
    Continental CEO Elmar Degenhart speaks with media during the North American International Auto Show.

    DETROIT—Continental A.G. CEO Elmar Degenhart stressed the importance of free and open international trade at a media briefing Jan. 15 during the North American International Auto Show.

    Noting that Continental alone spends $13 billion annually, buying parts and components it uses in the products and systems it supplies to North American vehicle makers, Degenhart said if someone is "trying to build up hurdles in this closed network, it would be very negative for the whole industry."

    Degenhart also pointed out that, on average, components cross borders three to four times before the final part or system is delivered. More trade barriers, he said, would impact the industry's just-in-time processes negatively and the "urgent need to optimize value in the supply chain."

    At the same briefing, Degenhart pointed out that Continental outperformed the market last year, with 8-plus-percent greater sales and a 10.8-percent pre-tax operating income ratio.

    Continental's revenue growth—before consolidation and exchange-rate effects—measurably outpaced the 2-percent rise in global production of cars and light commercial vehicles, Degenhart noted.

    "Continental's success curve continues to point upward," Degenhart said. "Our innovative technologies in the areas of assisted and automated driving, connectivity and electrification again helped us achieve above-average growth."

    Degenhart said his company's work with its vehicle customers resulted in an increase in incoming orders for the Automotive Group of more than $45 billion in 2017.

    In a separate briefing held at the recent Consumer Electronics Show in Las Vegas, Wolfgang Schaefer, Conti's chief financial officer pointed to strong sales and earnings growth in the fourth quarter, which included better-than-expected sales of winter tires and strong performances by the firm's automotive and ContiTech divisions.

    Regarding the possible reorganization of Conti, Degenhart said the company is looking at the firm's structure for the global economy in 2025 and beyond.

    The goal is to create a structure that's flexible and able to move quickly. The firm also is looking constantly at optimal market capitalization for the shareholders.

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