Continental AG is planning for a rebound in the remaining months of 2024 after suffering “a weak first quarter.” The company’s overall sales were down 5%, and the tire group also reported a 5% drop in the period.
The company recorded a profit loss of $57 million, down almost 114% from the $415 million recorded in the first quarter of 2023.
Continental says this will be its weakest quarter of the year, and its automotive, tires and ContiTech business sectors are all expected to improve as the year progresses.
A contributing factor was a slight decrease in passenger and light commercial vehicle production during the period. Globally, Continental says vehicle production fell by 1% compared to the same period a year ago. It was weakest in Europe, which is Continental’s core market — with volume down 3%, or around 4.4 million units.
Vehicle production in North America was up slightly, to 3.9 million vehicles, and China’s production was up 4%, to 6.1 million vehicles. By year end, Continental expects vehicle production to be “roughly on par with the previous year.”
Total company sales reached $10.5 billion, with tires contributing $3.5 billion in sales, down from $3.8 billion a year ago.
The primary factors for the tire sector’s performance were “weak tire markets in the truck and original equipment business, negative exchange-rate effects and fewer workdays in March. This, in turn, shifted the tire replacement business to April, which already appears to be a considerably stronger month for earnings. In the months ahead, the tires group sector will also benefit from an expected increase in demand.”
Despite the tough quarter, Continental did not change its outlook for 2024.
