Germany’s Continental AG has announced a major strategic shift, deciding to make its ContiTech group sector independent. This significant move is part of a broader initiative aimed at establishing Continental’s three group sectors—Tires, ContiTech, and Automotive—as distinct, independent entities. The decision, made public on April 8, 2025, emphasizes Continental's commitment to enhancing growth and value across its operations.
CEO Nikolai Setzer highlighted the rationale behind this restructuring, stating, "We are creating three strong, independent champions that will achieve their full growth and value creation potential as independent companies." This step reflects Continental's recognition of the need for agility and focused action in today’s volatile markets, aiming to position each sector to respond swiftly to market changes.
As part of this realignment, the company will also undergo changes in its Executive Board. Dr. Ariane Reinhart, who currently serves as the Executive Board member for HR and Sustainability, will step down on June 30, 2025. Ulrike Hintze has been appointed to take over her responsibilities, effective July 1, 2025. Setzer will also take on additional duties related to Sustainability, alongside his existing roles in IT and Communications.
ContiTech, which specializes in rubber and plastics, will operate independently as a material solutions specialist with a strong industrial focus. The plan is for ContiTech to assess various transaction options, with a sale being the most likely scenario as the company moves towards its independence, anticipated in 2026. This timeline is contingent upon the successful completion of the Automotive spin-off and the divestiture of the Original Equipment Solutions (OESL) business area.
The Automotive sector, which employs approximately 92,000 individuals and generated sales of around €19.4 billion in the fiscal year 2024, is set to be listed on the Frankfurt Stock Exchange in September 2025, pending approval from the Annual Shareholders’ Meeting on April 25, 2025. This listing signifies a pivotal moment for Continental as it transitions towards a more focused operational model.
Meanwhile, the Tires segment remains a critical component of Continental’s business strategy, boasting a successful global portfolio that includes car, truck, bus, and specialty tires. This sector generated approximately €13.9 billion in sales last year and employs over 57,000 people. The ongoing trends of sustainability, electric mobility, and digitalization provide ample opportunities for further growth in this area.
ContiTech, on the other hand, has around 39,000 employees and recorded sales of about €6.4 billion in 2024. The division is known for its innovative material solutions, particularly in industries like mining, construction, and energy management. The planned carve-out of its OESL business, which employs around 16,000 people across 16 countries, is currently underway, with potential buyers being sought.
This strategic realignment comes at a time when major automotive suppliers, including Continental, Bosch, and ZF, are undergoing significant restructuring due to a decline in car production and rising operational costs. The backdrop of a brewing trade war affecting exports to the United States adds further complexity to the automotive landscape.
Despite the potential benefits of this realignment, labor representatives have expressed concerns about the implications of such a separation. They have labeled the move "socially irresponsible, economically reckless, and technologically nonsensical," arguing that the ContiTech and tire divisions are deeply intertwined. Their concerns highlight the challenges that come with corporate restructuring, particularly in sectors where different divisions rely heavily on one another.
As Continental embarks on this transformative journey, the focus will be on ensuring that each newly independent entity can harness its unique strengths and capabilities. The company’s commitment to agility and responsiveness in a fast-evolving market landscape will be crucial to its success.
In summary, Continental AG's decision to make its ContiTech group sector independent marks a significant turning point in the company’s history. With a clear focus on enhancing growth and creating value, the restructuring aims to empower each sector to thrive in its respective market. As the automotive industry continues to face challenges, Continental's strategic realignment may provide the agility needed to navigate the complexities of the modern market.
