Continental cuts sales and margin guidance

Sales this year will be €1bn lower than forecast at €45m and the EBIT margin will be more than 9% instead of more than 10%, Continental said. The company blamed lower sales, rising costs and warranty claims for the warning.

Continental shares were down 13.6% to €160.10 at 11:31 BST.

At Continental’s original equipment business sales fell short in Europe and China. The company has also suffered weak demand for tyres in both those markets, lowering expectations. Development costs in Continental’s automotive division rose partly due to a high intake of orders. Costs also rose due to the transition to products and systems for electric and hybrid vehicles.

"The reasons for this revision are lower sales expectations, cost increases and warranty claims," the company said. "Despite these effects, the technology company continues to expect to grow faster than its relevant markets."

Continental said it was cutting costs and reducing investment to take account of lower sales expectations.