BERLIN (Reuters) – Continental on Wednesday lowered its annual sales target for its tire-producing division, citing a declining tire replacement market in Europe and North America.
The German automotive supplier now expects sales between 14 and 15 billion euros against a range of 14.5 to 15.5 billion euros previously.
The group said it needed to “catch up considerably” in its automotive segment which fell short of expectations in the second quarter partly due to currency effects and transport costs.
Rising costs for materials, wages, energy and logistics are expected to impact earnings for the year by 1.4 billion euros, the company said, up from a previous estimate of 1. .7 billion euros.
Continental confirmed its adjusted profit margin of 4.8% on sales of 10.4 billion euros for the second quarter, as indicated in preliminary results published in July.
The group said it now expects production of passenger cars and light commercial vehicles to increase by 3% to 5% in 2023, whereas it previously forecast a rise of 2% to 4%.
In contrast, global tire replacement activity is expected to remain unchanged or decline by up to 2%.
(Report Victoria Waldersee; Lina Golovnya, edited by Blandine Hénault)
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