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Continental Returns to Tire Roots as Business SlowsContinental Returns to Tire Roots as Business Slows
Tier 1 supplier plans to sell its ContiTech industrial unit as revenues crash and challenges of U.S. tariffs on the auto sector take a bite out of profits.
2 Min Read
German supplier is focusing on its most profitable, successful business.
Continental announces plans to separate its ContiTech division, which specializes in rubber and plastics, into an independent entity, with a sale being the most probable outcome. This move is expected to follow the spin-off of its automotive unit and the sale of its Original Equipment Solutions business.
The German company’s move is in response to a slowdown in vehicle production, rising costs and the prospects of U.S. tariffs hitting the auto sector that has prompted the company to make job cuts along with rival suppliers Bosch and ZF. ContiTech is anticipated to become independent by 2026.
Continental’s tire business, employing about 57,000 employees, is its most profitable unit recording €14 billion ($15.30 billion) in revenue and a profit margin of 13.7% in 2024. compared with a 6% margin for the company as a whole.
ContiTech employs about 39,000, with sales of around €6.4 billion ($7 billion) in 2024, a steep fall from its €41.4 billion ($45.6 billion) in sales in 2023.
A company statement says the automotive Original Equipment Solutions unit, which supplies rubber products to automakers and employs about 16,000 people in 16 countries, is currently being presented to potential buyers and partners.
Unions are attacking the decision to spin off ContiTech arguing that it and the tire division are too deeply intertwined to be torn apart.
Behind The Collapse
Continental’s non-tire businesses have experienced a significant decline due to several factors.
The automotive sector has faced persistent challenges, particularly in Europe and North America, where economic uncertainties have led to reduced vehicle production. Continental reported a 7% decline in U.S. car production at the beginning of 2025, attributed to “economic uncertainty.” Similarly, European production has been sluggish, affecting demand for Continental’s automotive components.
The rapid transition towards electric vehicles and advanced driver-assistance systems has reshaped the industry landscape. Traditional suppliers like Continental have faced challenges adapting, as automakers increasingly develop in-house digital and electronic systems. This shift has diminished the demand for certain components that Continental’s non-tire divisions produce.
As Continental’s automotive division has struggled with low profitability in recent years,the company has undertaken significant restructuring efforts, including plant closures and the elimination of approximately 3,000 research and development jobs, to mitigate financial losses.
Continental AG’s tire division consistently ranks among the top four tire manufacturers globally. In 2024, it maintained its position as the fourth-largest tire maker, following Michelin, Bridgestone and Goodyear, according to Tire Business. Additionally, Continental’s brand value increased, securing the third position in global tire brand rankings, behind Michelin and Bridgestone, the publication says.
Company executives say they see the moves as the most strategic option to position the company for the future. “Markets are as volatile and dynamic as ever. In these situations, we need pure-play actors that can act in an agile way,” CEO Nikolai Setzer tells media during a press conference following the announcement.
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