HANOVER, Germany—Continental A.G.'s drive to be a mobility leader is so important it's built in the company structure.
The Continental Supervisory Board March 16 approved a realignment plan that would transform the advanced driver assistance systems and automated driving into "Autonomous Mobility," an independent business area, nestled under the Automotive Technologies group business sector.
The move, while underscoring Continental's focus in recent years, is strategic in that it positions the company for greater growth, according to CEO Nikolai Setzer.
"The autonomous mobility market will more than double in the next three years," Setzer said in a statement. "Owing to the strategic significance of the necessary technologies and their promising growth prospects, we are intensifying our focus here by creating new structures to research, develop and industrialize these technologies. This also enables us to provide all of our business areas with the additional freedom to concentrate even more on their core areas."
To further bolster new mobility technology, Continental has earmarked between $240 million and $300 million in 2021 for developments and advancements in ADAS and AV technology. The goal is to invest aggressively in technologies that have potential for greater return, especially as new mobility begins to take hold throughout the automotive industry.
Between 2018 and 2020, Continental's ADAS and autonomous technologies led to more than $10.3 billion worth of orders from customers worldwide.
Setzer believes the company already is positioned as a leader in the ADAS and autonomy arenas, but said Continental is determined to expand its opportunities. This includes investments in and partnerships with technology companies of all sizes.
"We are expanding this position extensively, giving our activities in the area a big boost and gaining momentum as a top team in the autonomous mobility market," Setzer said in a statement. "At the same time, we are opening ourselves up even more to potential large-scale cooperation with technology partners and start-up companies. After all, our goal is and will continue to be global technology leadership when it comes to assisted and automated driving."
In addition to establishing the new business area, supervisory board members also gave Vitesco Technologies the green light for spin-off and subsequent market listing in the second half of 2021. The move needs to be approved by shareholders and will be presented at Continental's annual meeting April 29.
"If the shareholders agree, we will turn one global champion into two in the future—each in their own area," Wolfgang Reitzle, chairman of the supervisory board, said in a statement. "Vitesco Technologies is a trailblazer in the field of powertrain electrification, and Continental is a pioneer for connected, safe and sustainable mobility. With this step, both technology companies will be able to achieve their full potential,"
Vitesco previously was positioned to be spun off, but the move was delayed last year amid the financial turmoil and market uncertainties presented by the COVID-19 pandemic.