German auto parts supplier Continental is considering the sale of the car division currently bundled within ContiTech, manager magazin reported on Monday, citing company sources.
The possible sale would be part of a wider reorganisation of the company being planned by Supervisory Board Chairman Wolfgang Reitzle and the executive board around CEO Nikolai Setzer, the publication added, citing the sources.
Continental has taken a series of steps in recent years to restructure and boost profitability as its market capitalisation tumbled to 13 billion euros ($14.17 billion) from 50 billion in 2018.
The company said in February it was reorganising ContiTech from six divisions into one in each of Europe, the Americas and Asia Pacific, while bundling its car activities into a separate unit geared towards electromobility.
According to manager magazin, that unit – specialised in belts and sealing systems with a turnover of more than 2 billion euros – is due to be separated from the business within two years. It could be sold, split up further or merged with another company, the publication reported.
The highly profitable tyres business and non-automotive part of ContiTech will be retained as the future core, it said, quoting an unnamed top manager who warned of the threat of a workforce rift if the tyres business continued financing the cars business.
Continental declined to comment on the report.
The company said in May that ContiTech would be realigned with the aim of enhancing its impact and efficiency, without providing further details.
Source: Reuters.com