HANOVER, Germany—Continental A.G.'s executive board approved plans to spin off the company's automotive group sector—which represents nearly half of Conti's annual sales revenue—following a detailed evaluation launched in early August.
Subject to approval by the supervisory board in March 2025, the spin-off is expected to take place by year-end 2025, Continental announced Dec. 9. The company aims to complete preparations for the carve-out by the end of the third quarter of next year.
The decision represents a complete reversal of the company's strategic direction over the past 25 years to become a global leader in automotive component systems and will return it to its roots as a tire and rubber goods maker.
While progressing the automotive spin-off, Continental CEO Nikolai Setzer said the group "continues to strengthen the independence of its tires and ContiTech group sectors."
"We have set up our group sectors as strong, self-sufficient units with clear structures, the CEO continued. "They have matured and are ready for greater independence."
The Tires sector accounts for 34 percent of Continental's annual revenue with the non-tire rubber ContiTech business representing 16 percent.
With fiscal 2023 tire-related sales of $12.5 billion, Conti is considered the No. 4 tire maker worldwide, according to the 2024 Global Tire Report rankings. In addition, Continental was ranked No. 8 among global OE suppliers by Automotive News, a sister publication under the Crain Communications umbrella.
Continental remains "fully focused on spinning off automotive and achieving greater independence for our profitable Tires and ContiTech group sectors," Setzer said.
The overall goal, according to the German group, is to create "a lean, focused holding structure by the end of 2025."
"Corporate responsibility will increasingly lie where it delivers the greatest value—in the group sectors, close to markets and customers," explained Setzer.
Continental's new structure, he added, will let us respond "more flexibly to customer and market developments, enabling us to maximize our opportunities."
