Continental is one of the best global suppliers of automotive parts. It ranks 4th in the list of top 100 global suppliers for original automotive suppliers. However, due to the decline in the profit in the automobile industry, the company has been in a slump lately. That is why it wants to adjust its profit falls this May.
The reason for the slump in the company is because of the decline in the vehicle industry. Continental suffered from a 1.2 billion-euro ($1.3 billion) net loss in 2019, which is a considerable loss. And that’s why the company wants to come up with a cost-savings plan.
CEO Elmar Degenhart said that the company was forced to come up with cost savings plans because the vehicle industry is going to be in decline for the third year consecutively. That’s why the company thinks it has to come up with higher profit margins to make up for the losses.
According to CEO Elmar Degenhart, Continental will change its profit Plans and cost savings plan. And the profit margin may go from 5% to 6.5%. It is a huge jump, but the company has to take it to survive. The interest and taxes fell 22 percent to 3.2 billion euros ($3.6 billion) in 2019, and that was a huge set back for the company.
Continental is also affected by the coronavirus epidemic because it has caused disruptions in the transport of parts. However, Degenhart hopes everything will return to normal towards the second part of the year.