As part of its first quarter financial report, Continental AG provided a "tariff deep dive" in response to President Donald Trump's ongoing trade actions, and outlined how the company is monitoring and mitigating the existing tariffs and others that may still come down the pike.
Continental painted a picture of its overall U.S. manufacturing footprint.
In Continental’s tires business, the company has three U.S. plants with a combined capacity of more than 16 million tires. Those plants produce a mix of passenger, light truck and commercial truck tires.
In addition to U.S. production, Continental says it imports tires into the U.S. “mostly from Europe.” Imports from Mexico account for “roughly 10%” and “imports from China (are) very limited.”
Continental does export some tires made in the U.S. — and noted Canada as an example market of where those tires are shipped to.
Outside of tires, Continental has two U.S. plants for its Automotive sector and imports mostly finished goods and raw materials, the largest share of which comes from Mexico.
For ContiTech, U.S. plants produce conveyor belts and hoses, and the business has direct imports of finished goods and production material from global facilities, with more than half coming from Mexico.
With all three business units combined, Continental says the value of its U.S. import volume is $4.1 billion.
Continental's View of the Tariff Status Quo
The tiremaker provided a "tariff deep dive" overview on May 6, when the company reported its first quarter earnings:
- 25% additional tariffs on steel and aluminum have been in place since March 12, 2025.
- 10% “reciprocal” tariffs imposed on all goods since April 10, 2025.
- 25% additional tariffs levied on all auto parts since May 3, except parts that are complaint with the U.S.-Mexico-Canada Agreement (USMCA). Continental noted that “almost” all of its Automotive imported goods are USMCA compliant, and that the “majority” of its ContiTech imports from Mexico are USMCA complaint.
- Additional country-specific “reciprocal” tariffs have been suspended for 90 days, until July 9, 2025, with the exception of China.
How Continental Is Mitigating the U.S. Tariff Actions
These are the actions Continental outlined as it monitors the ongoing tariff climate:
- Task forces are operating in all three of the company’s business sectors (tires, Automotive and ContiTech)
- The company is re-evaluating its non-USMCA claimed goods.
- Continental is reviewing customer agreements.
- The manufacturer is optimizing both its production and supply chain, “including resourcing and rerouting.”
- Continental said it is in “constant assessment of (the) impacts” of the tariffs, and did not quantify the net impact possibilities due to the “dynamic situation.”
Tariff Impact on Vehicle Production in 2025
Continental said vehicle production is expected to decline in 2025 “due to tariff-related uncertainties.”
In the first quarter, global vehicle production was up 1% — but that was significantly impacted by strong, double-digit gains in China. Production in both Europe and North America was down, and those markets are expected to continue to be weak for the remainder of the year.
While China showed an 11% increase in vehicle production in the first quarter, Europe was down 7% and North America was down 5%.
Full-year estimates for North America, China and the overall global market have all worsened, with North America taking the biggest hit. Previous estimates called for vehicle production to be down from 1% to 3%, but in North America the numbers are now down 8% to 10%.
As it relates to replacement tires, the numbers aren’t quite as dire. For 2025 Continental expects Europe and North American PLT replacement tire sales to be in the range of flat to up 2%, while China will be up !% to 3%.
Commercial vehicle production in the first quarter was down double digits in both Europe and North America — a 16% drop in Europe and 12% decline in North America. But Continental expects those numbers to turn around, and says full-year commercial truck production should rebound to being up 2% to 4% in Europe, and flat to down 2% in North America.
The outlook for commercial replacement tires in North America is in the range of down 4% to up 1%.
