March 4 (Reuters) - German car parts supplier Continental on Wednesday guided for broadly stable 2026 sales and profitability in its core tyres business in a persistently volatile demand environment.
Continental sets broad 2026 goals for tyres business in volatile market
Continental's 2026 Tyres Business Outlook and Strategic Initiatives
By Amir Orusov
March 4 (Reuters) - German car parts supplier Continental on Wednesday guided for broadly stable 2026 sales and profitability in its core tyres business, as it continues to reorganise its business in a volatile demand environment.
Financial Forecasts for 2026
It expects annual sales in the key unit to land between 13.2 billion and 14.2 billion euros ($15.3 billion and $16.5 billion), against 13.8 billion euros in 2025. At its midpoint, the forecast is slightly below a consensus estimate of 14.0 billion euros.
Uncertainty in Market Projections
"We established such a wide corridor because we have to reflect the uncertainty we are currently seeing," finance chief Roland Welzbacher told Reuters. "Of course, we are aiming to reach the upper half."
Profit Margin Expectations
Adjusted operating profit margin is seen between 13.0% and 14.5% for the tyres business, compared with 13.6% last year. Analysts' average estimate, as shown on the company's website, was 14% for 2026.
Challenges Facing Continental and the Industry
German car manufacturers and their suppliers have been struggling with U.S. tariffs, weaker demand, intensifying Chinese competition, negative foreign exchange effects and supply chain changes weighing on margins and fuelling future uncertainty.
Tyre Demand and Production Outlook
In 2026, Continental expects global replacement tyre demand for passenger cars to be between a 1% decline and a 2% increase, while production of passenger cars and light commercial vehicles is seen as stable or falling by up to 2%.
Impact of Geopolitical Tensions
The outlook excludes any potential impact from the escalating Middle East conflict, it said.
The U.S.-Israeli war on Iran has prompted a sharp increase in oil prices, raising concerns for Continental, which relies on oil‑derived raw materials to make synthetic rubber for its tyre production.
Significantly higher oil prices over a longer period would drive up input costs, Welzbacher said.
Road to Pure-Play Tyremaker
ROAD TO PURE-PLAY TYREMAKER
Continental, which is undergoing a major restructuring in a push to become a pure‑play tyres company, said the sale of its Original Equipment Solutions unit was completed in February.
Divestments and Investor Interest
Welzbacher also said the company had seen a lot of interest in ContiTech from potential investors, with possible offers expected in the first quarter of 2026. He declined to comment on a purchase price.
Growth Plans Post-Restructuring
After selling the non-tyre units, Continental has a plan to grow both its top and bottom lines, Welzbacher said.
($1 = 0.8625 euros)
(Reporting by Amir Orusov in Gdansk, additional reporting by Christina Amann in Berlin, editing by Milla Nissi-Prussak)
