In a year in which Continental AG’s overall global sales grew 5.1% and its net income grew by more than 1,600%, its tire sales slipped slightly in 2023.
Tire sales for 2023 totaled $15.40 billion, down 0.3% from $15.45 billion in 2022. Continental’s tires sector sales accounted for about 33% of the company’s overall sales, and is the second largest of four sectors.
The company recorded global sales of $45.7 billion, up from $43.4 billion in 2022. Net income was $1.2 billion, up from $73.5 million the year prior. That’s a 1,635% increase.
Continental noted that its tires business “delivered stable profitability despite weak tire replacement markets in Europe and North America.” The company noted the tires sector had “strong results in a challenging environment.”
Nikolai Setzer, Continental’s CEO, said, "2023 was another challenging year in many respects, with geopolitical conflicts, war, weak markets in the tire replacement business and inflation impacting our economic development. We can’t count on any tailwinds in the near future, either.”
Despite the hurdles, Setzer said Continental’s financial performance is on a positive trend. (He also noted that “four out of five new cars are equipped with hardware and software solutions from Continental,” and that “the world’s 10 highest-volume manufacturers of electric vehicles all trust in Continental tires for their original equipment.”
As for the year ahead, Continental is referring to 2024 as “the beginning of our era of execution.” And in tires, that means a focus on these things:
- “Electrification, digital services and UHP growth
- Continued investment to strengthen our setup, particularly in APAC (Asia Pacific) and the Americas.”
In its outlook for 2024, Continental expects the passenger and light truck replacement tire market in North America to be somewhere between flat to up 3%. (The outlook is the same for Europe, and for the market worldwide.) Continental sees continued growth in the Chinese tire market, with replacement growth somewhere between 2% and 5%.
Continental expects the commercial tire market in North America to return to positive in 2024, with replacement market gains in the range of 2% to 4%. (At the same time, Continental is estimating a slip in commercial vehicle production in North America between 4% and 6%.)
With those market expectations, Continental’s sales outlook for 2024 includes global sales of between $45.2 billion- $48.5 billion. The company’s tire sales are expected to range between $15.4 billion - $16.5 billion.
Fourth quarter
In the final three months of 2023, Continental says its global tire volumes were up 1.7%, “supported by short-term demand in the replacement market.” But in those same months, the company recorded a negative effect from price/mix, which was down 1.1%. A “low demand in truck tire replacement (was) driving negative sales mix effect.”
For the quarter, Continental’s tire sales beat that of all previous periods of 2023 and totaled $3.9 billion, down 2.5% over the final quarter of 2022.
