Continental sees no 'cause for concern' in 2012: chief

13th September 2011, Comments 0 comments

German automotive supplier Continental said Tuesday it sees no reason to worry about its business next year and is even predicting a stabilisation in raw material prices from which it would benefit.

"We're looking ahead to 2012 with measured optimism," Continental chief executive Elmar Degenhart told a news conference at the IAA motor show here.

"We won't see the same rates of growth as in 2011, but there's no cause for concern," he said.

There was also no reason for the group to adjust its targets for the current year: sales growth of at least 10 percent to 29.5 billion euros ($40.3 billion) and an pre-tax operating margin of 10 percent, Degenhart said.

Like other makers of car parts, tyremaker Continental has been affected by sharp rises in raw materials prices in recent months.

"The price of raw materials such as rubber have reached a ceiling. We don't expect any further additional increases or decreases in raw materials prices," Degenhart said.

At the same time, the prices of rare earths, raw materials produced almost solely in China and in quantities insufficient to meet the needs of all electronic component manufacturers, "represent a huge challenge for the auto industry," the chief executive added.

In fact, such materials "aren't rare, just difficult to mine and we believe the high prices will prove to be only a temporary phenomenon," he said.

Continental is presenting an innovative electric engine at the IAA which does not use rare earths, which it will sell to French carmaker Renault for its Kangoo and Fluence electric models.

© 2011 AFP

0 Comments To This Article