Automotive supplier Continental (CON.DE) on Wednesday reported a second quarter net loss of €741m (£669m, $876m), compared with a profit of €484m as the automotive industry was hammered by the pandemic. The company said that global vehicle production fell by 45% in the second quarter to 12.3 million units.
The Hanover-based company, one of the world’s largest auto suppliers, said it was expecting car production to drop by as much as 20% in the current quarter compared with the same three months in 2019.
“A market crash in the automotive industry like the one we are experiencing now has not been seen since the end of the Second World War,” said chief executive Elmar Degenhart in a statement, however he added that the company “outperformed the respective markets in China, the USA and Europe” in the first and second quarters of 2020.
Continental announced in July that it had been hit by a year-on-year group sales plunge of almost 40% in the second quarter, and was burning through money, with free cash flow at -€1.78bn.
The company said it won’t issue guidance for 2020, because it is currently too difficult to assess potential further adverse consequences of the coronavirus pandemic on production, supply chains and demand.
Car manufacturers and the companies that supply them have been hammered by the coronavirus pandemic, first as global supply chains broke down as countries went into lockdowns, then as plants and dealerships closed for almost two months.
There may be signs of a gradual rebound on the horizon, according to Germany’s Ifo economic institute, which said the German car industry has seen demand picking up again as lockdowns have been lifted. Automotive companies surveyed said that their order books showed signs of an uptick in July, and that they expect exports to rise.