Frankfurt (Germany) (AFP) – Trading in Continental’s struggling auto parts division got off to a slow start Thursday as it was listed on the Frankfurt stock exchange, the latest upheaval in Germany’s car industry. Shares in the new firm Aumovio, which makes components including braking systems, sensors, and displays, started trading at around 35 euros each ($41), valuing the company at some 3.5 billion euros. But this was below analyst expectations for a valuation of up to five billion euros.
Aumovio CEO Philipp von Hirschheydt hailed a “bold new chapter” as he rang the bell at the Frankfurt Stock Exchange to mark the start of trading. The new entity will be “smaller…but significantly faster,” he said. He acknowledged that “markets are tough, growth is uncertain” but insisted that Aumovio could be “the driving force behind the software-defined vehicle.” It was the biggest initial public offering this year in Frankfurt, where the market has been subdued amid heightened uncertainty.
Continental announced last year the decision to spin off the unit, which is the group’s biggest division but has suffered falling sales, as it seeks to focus on its traditional tyre business. It is the latest sign of strain in Germany’s troubled auto sector, which is battling rising manufacturing costs at home and weak demand, as well as fierce competition from fast-growing Chinese rivals.
Continental, which traces its history back to 1871, is also planning to hive off its industrial division, which makes equipment like hoses and fuel tanks. Each Continental shareholder will receive one Aumovio share for every two shares they hold. Continental’s auto parts division generated sales of 19.4 billion euros ($23 billion) in 2024, down 4.3 percent year on year.
The Schaeffler family, which holds a controlling interest in automotive supplier Schaeffler, also owns 46 percent of Continental’s shares. Like other German auto firms, Continental is slashing its headcount and announced this year and last plans to cut 10,000 jobs, out of about 190,000 worldwide.
© 2024 AFP
