Continental’s executive board has revealed that it is considering the viability of spinning off the powertrain division as a separate entity. The new company has tentatively been named Vitesco Technologies and is likely to be listed on a stock exchange in Germany, provided all goes as planned. The company will be considering this strategy in tandem with its current for a potential partial IPO of the division.
Continental CEO Dr Elmar Degenhart said that this move would ensure that the company’s powertrain business would be able to steer a new, more promising course under the best conditions in 2020, whether it is through a spin-off or through a partial IPO. As an outcome of this decision to review both these options, all stakeholders would have a clear idea when it comes to planning for the future so that they can focus on the actual business, as well its growth and technological expansion.
Dr. Degenhart also made it clear that the Powertrain employment guarantee would continue to be in force till 2023 irrespectiv eof whether there are any changes to the structure of the company
“Regardless of which approach is taken toward independence, the key points agreed upon with the employee representatives in ‘Continental in Motion – our Alliance for the Future,’ published on April 18, 2018, apply to Powertrain.”
The powertrain market has been experiencing significant disruption in view of the advent of electric and hybrid vehicle technologies. Andreas Wolf, who helms the powertrain business, emphasized the importance of readily available entrepreneurial freedom to ramp up future business success:
Wolf said, “We are looking forward to 2020 and are eager to get started. We have a strong position, particularly in the areas of electronics and electrification, which are the foundations on which we will implement our profitable growth strategy. The important thing now is to step in early and play a greater role in shaping this unique growth market. In such a highly volatile and dynamic environment, we now need clarity fast regarding the next steps, as well as a high degree of independence and flexibility.”
Wolf added that in order ot achieve these goals, many people preferred the partial IPO route. Adding the possibility of a spin-off would give the company more options when it comes to Vitesco Technologies is primed for success in 2020.
Manju Mathew, an MBA in marketing, completed publisher training courses from the Oxford Brookes University and New York University. She started with marketing and PR roles before moving on to her current position as a full time writer. Currently living in Dubai, her life as an expat has sharpened her observation skills and flair for writing. She enjoys writing about luxury cars like Ferrari, Lamborghini, etc even if she can only dream of owning them.
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