Continental is putting more focus on the electric future of mobility, due to the tightening of political targets and regulations, alongside a disruptive global e-mobility market.
Andreas Wolf, head of Continental’s Powertrain division, which in the future will operate under the name Vitesco Technologies with Wolf as CEO, explained that the company must continue to be a leader in innovative e-mobility solutions.
“Our customers are increasingly and consistently turning to the electrification of combustion engines through hybrid drives as well as to pure battery-powered vehicles. We have long been a technological leader in the field of electronic control units and related functional software,” he said. “In keeping pace with our customers and markets, we are now focusing more rapidly and systematically on our strengths and are targeting the future of electric mobility with our broad and successfully applied experience.”
With this strategy, Continental aims to ensure that its powertrain business remains financially strong, competitive and sustainable in the long term.
“The future is clearly electric. We are convinced of this,” comments Wolf, adding: “The transformation phase along the way will almost certainly be characterized by a combination of drive systems. In other words, classic combustion engines will continue to be used for many years and – especially in combination with efficient hybrid technologies – will make a significant contribution to lower emissions.”
Within this mix of drive systems, Continental expects diverging dynamics. The market for high-voltage components and hybridization solutions, for example, is growing at a much faster pace than anticipated. This sharp rise in production is leading to an economically attractive business at an earlier stage than previously thought.
Combustion-only components, meanwhile, are set to offer only selective growth opportunities in the future, which has prompted Continental’s Powertrain division to reduce investment in the hydraulic components business. This part of the strategy relates primarily to injectors and pumps for gasoline and diesel engines.
“Investments in research and development and in production capacity for innovations are becoming less profitable,” said Wolf.
This means that existing orders will be fulfilled, but new orders will play an increasingly marginal role. “This transformation phase will likely extend over a number of years, as combustion engines essentially serve as the basic drives for hybrid solutions,” remarks Wolf, before adding that the business in components for exhaust-gas after treatment and fuel delivery would also be reviewed.
“The main reasons for this are intense price pressure and a high degree of dependency on the further development of the diesel engine market. We are currently examining all possible options here to ensure our portfolio is sustainable, profitable and competitive. We’re also considering partnerships,” Wolf added.