Valeo and Continental got off with a black eye
The corona crisis did not leave Continental completely unscathed, but it did not strike as badly as feared. According to preliminary figures, overall sales fell by 11% to €9.84 billion. The electronics and tire supplier thus slightly exceeded its own reduced expectations – only recently the company had slashed its expectations to a range between 9.4 and 9.8 billion euros. The profit margin was also better than feared at 4.4% – but also significantly worse than a year ago. Sales in the Automotive Technologies division shrank by 11.5% and those of the Rubber Technologies (Tires) division by 10.8%. The Powertrain Technologies unit, now operating under the name Vitesco, did not fare much better – sales there fell by 9.1% despite the accelerating switch to electromobility. Due to the clouded visibility caused by the Corona crisis, the company did not want to give an outlook for the 2020 financial year.
Valeo also had to contend with the crisis and the sharp drop in demand for cars that followed. In the first quarter, the company’s revenue fell 8% year-on-year to €4.49 billion. Due to the crisis, production was temporarily halted at all 34 Chinese plants as well as in Europe and North America. In the current second quarter, however, Valeo intends to return to last year’s production levels in China. Nevertheless, Valeo considers itself to be on the winning side in the competition among automotive suppliers – after all, all business units have performed better than the market average, explained Valeo CEO Jacques Aschenbroich. Production start-ups and capacity expansions in various high-tech segments, including cameras, driver assistance systems, 48V electrification and LED lighting, had a positive impact.
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Continental radically slashes forecast
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Step by step, the automotive industry restarts production
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