Continental has said it would cut costs and investments in the wake of further vehicle production cuts.

Executive board chairman Karl-Thomas Neumann said that an EBIT margin of 7.5% to 8.0% was still in sight after a supervisory board meeting at the company’s headquarters in Hanover.

But the supplier has decided not to make any dividend payments so that it can reduce debt.

Continental is being acquired by bearing manufacturer Schaeffler which acquired more shares this week and now owns around 22% of Conti.

A cost-cutting programme was announced in November, in addition to ongoing restructuring measures.

Neumann said: “In the second half of 2008, we already hit the brakes hard, making noticeable and painful cuts in all areas for 2009. In some cases, we postponed or stopped extensive investment plans.”

Cost-cutting measures were described as being in the ‘three-digit millions’.

Reuters reported the company would cut jobs in the US where it employs around 25,000.

The supervisory board agreed yesterday to renew Newumann’s contract as executive board chairman by five years.