Continental AG’s tire business increased its adjusted operating profit during the first half of 2026, despite contractions in North American passenger, light truck and commercial replacement tire demand.

The company’s tires group generated first-half sales of approximately $7.58 billion, down 2.5% from $7.77 billion during the same period last year. Adjusted earnings before interest and taxes, or EBIT, increased 13.6% to approximately $1.13 billion, compared with $990 million during the first half of 2025.

Continental’s adjusted tire EBIT margin climbed to 14.9% from 12.8%.

The company primarily attributed its sales decline to negative exchange-rate effects. Excluding currency effects and changes in Continental’s scope of consolidation, tire sales were flat year-over-year. 

Continental’s second-quarter results showed an even larger improvement in profitability. Tire sales totaled approximately $3.83 billion, essentially flat compared with the second quarter of 2025. Adjusted EBIT increased more than 26% to approximately $586 million, while the tire group’s adjusted EBIT margin rose to 15.3% from 12.1%, exceeding Continental’s full-year tire margin guidance.

At the corporate level, Continental reported second-quarter sales of approximately $5.08 billion, down 9.1% year-over-year, largely because of the February sale of its Original Equipment Solutions business. Excluding changes in Continental’s business portfolio, quarterly sales were essentially flat.

Despite the reported sales decline, Continental’s operating profitability improved. Group adjusted EBIT increased 35.1% to approximately $656 million. Reported net income, however, fell 45.9% to approximately $316 million, with the year-over-year comparison affected primarily by the 2025 spin-off of Continental’s automotive business, which now operates as Aumovio.

North American replacement markets contract

Continental estimates that North American replacement tire demand for passenger cars and light commercial vehicles declined 3% during the first half of 2026.

The company attributed the contraction to excess inventories of Asian imports and weak demand. Continental expects the North American passenger and light truck replacement market to finish the full year between 2% below and even with 2025.

The drop was more severe in the commercial sector. Continental estimates the North American replacement market for medium and heavy truck tires declined 14% during the first half. It expects full-year demand to finish between 10% and 14% below the prior-year level.

Continental’s tire sales attributed to North America totaled approximately $2.17 billion during the first half, down 8.1% from $2.36 billion one year earlier. Those figures include both original equipment and replacement tire sales and represent revenue rather than unit volume.

Against that broader market backdrop, Tansu Isik, CEO of Continental Tire the Americas LLC, told MTD in an exclusive interview in June that Continental was continuing to outperform the market.

“Our performance has been significantly better than the rest of the market in both passenger and light truck, as well as truck tires,” Isik said.

Isik described passenger and light truck tire sellout as relatively steady following weather-related disruptions early in the year. He said truck tire demand had been slower, while fleets remained focused on products and services that could improve fuel economy, mileage and uptime.

He also said Continental’s premium tire segment had remained resilient, despite some consumers moving toward lower-priced products. Continental continues to position its namesake brand in the premium tier, while using General Tire to serve customers with different pricing needs.

Premium tire mix boosts earnings

Continental attributed its improved tire profitability to a larger share of tires measuring 18 inches and above, favorable raw material costs, lower impacts from currency fluctuations and tariffs and continued cost discipline.

The company’s passenger tire replacement sales in the Americas and Europe were below prior-year levels because of weak market conditions. Original equipment tire sales also declined amid lower vehicle production, while global commercial tire sales were slightly below the previous year.

Continental entered the second quarter expecting increased ultra-high-performance tire volume to produce a favorable price and product mix. The company also expected the impact of tariffs to improve from the prior year, despite tariffs continuing to affect tire markets, particularly in North America.

Those benefits could be more difficult to sustain during the second half as material expenses begin to increase.

“For the second half of the year, however, we expect raw-material costs to increase substantially and have already taken steps to address this,” said Continental Chief Financial Officer Roland Welzbacher in a recent press release.

Continental did not announce a related tire price increase at this time.

Continental maintains tire outlook

Continental continues to forecast full-year tire sales of approximately $15.2 billion to $16.35 billion and an adjusted EBIT margin of 13% to 14.5%.

The company also expects passenger and light truck replacement demand in North America and Europe to improve slightly during the second half compared with the first six months. However, it expects the North American commercial replacement market to remain down year-over-year.

Continental revised the presentation of its group outlook following its agreement to sell ContiTech to Lone Star Funds. ContiTech is now classified as a discontinued operation and is no longer included in Continental’s continuing-operations outlook.

The sale represents the final phase of Continental’s transition into a tire-focused company, following the earlier spin-off of its automotive business.

Continental continues North American investment

The short-term market declines have not stopped Continental from expanding its North American manufacturing and distribution capabilities.

Continental is investing $76 million in a highly automated finished-goods warehouse at its Mount Vernon, Ill., tire plant. The facility will hold approximately 500,000 passenger car tires and is scheduled to begin operating in 2027.

Isik also told MTD that Continental plans to open a warehouse in the Dallas-Fort Worth area later this year and is investing in automation, product expansion and additional mixing capacity at Mount Vernon.

He described North America as an important growth region and said Continental remains committed to strengthening its manufacturing footprint, supply chain and proximity to customers throughout the Americas.

Editor's note: Financial figures were converted from euros to U.S. dollars using the exchange rate on Aug. 4, 2026.