AUTO PARTS
Continental sees slowdown
Continental AG, Europe’s second-largest maker of auto parts, including tires, said sales and profitability growth may slow in 2013 as the region’s market contraction causes unpredictability.
Continental forecast sales will rise about 5 percent this year, compared with an increase of about 7 percent in 2012. Adjusted earnings before interest and taxes will “remain above 10 percent” of revenue, versus a 10.7 percent margin last year, the Hanover, Germany, company said.
“We shall very likely not quite be able to hold to our tempo in the successful year 2012,” as global car production may increase by about 2.5 percent to a “mere” 82 million vehicles this year, Chief Executive Officer Elmar Degenhart said in the statement. There is “still a great deal of uncertainty regarding the course of passenger car production and other of Continental’s key sales markets.”
Europe’s car market was probably at the lowest in almost two decades last year, according to the region’s main industry lobby. Automotive executives are forecasting a sixth consecutive contraction for 2013. That contrasts with a possible acceleration in auto sales growth this year in China that the country’s carmakers association predicted on Jan. 11.
Revenue at Continental last year totaled about $43.8 billion, the company said.
Declining demand in Europe and slower expansion rates in the U.S. may hamper Continental’s growth this year, Chief Financial Officer Wolfgang Schaefer said.
The tire division is unlikely to be helped by a decline in raw-material prices a second year, after lower supply costs at the unit helped earnings in 2012, Schaefer said.
Rubber prices in 2012 fell from record highs in February 2011.
— From wire reports