Continental says it predicts increased opportunity for its content supply as steeply falling oil costs translate into greater consumer confidence, particularly in the US.
Motorists have seen the dramatic slump in the price of a barrel of oil translate into around a 20% fall in the cost of fuel at the pumps, but commodities appear stubbornly resistant to such market volatility.
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“If we go to our rubber groups and tyre production, then we have some materials based on oil, but this is not of that importance in relation to the price of natural rubber,” a Continental spokesman told just-auto from Hanover.
“We are expecting a little bit less of cost, but we are expecting the rise in cost of natural rubber, so it is hard to predict which one is offsetting the other.”
The Continental spokesman highlighted speculation at this year’s North American International Auto Show (NAIAS), US consumers might be tempted back to more traditional and larger vehicles running on cheaper fuel and emphasised the opportunity for the supplier.
“We see it in Detroit – gas guzzlers are back on the road again and mainly these are big cars,” said the Continental spokesman. “Usually they have content of many systems we are seeing and providing.
“They [consumers] can go for a mid-size car and SUV. We can’t tell how far it [oil price] is going to influence car sales and volumes. It is a positive influence.
“It is stimulating the sentiment of car buyers in the US.
The component manufacturer also estimates overall global car production growth to increase 2% to 89m cars, with China forecast to rise by 8%.
Announcing its preliminary numbers for 2014, the supplier unveiled adjusted EBIT of more than EUR3.8bn as “further proof of the outstanding performance” achieved by Continental’s 190,000 employees.
“You can see our guidance overall is realistic as we say as an automotive supplier, many of of our products and customers are growing faster than the market,” said the Continental spokesman.
“It is powertrains, interior systems, connectivity. If you look at the growth rates of this content we provide into cars, these systems are growing much faster than the market itself. Installation rates are growing faster than production.”
