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Continental's Warning on Car Slump Shows Reality Is Hitting Home
- Shares jump as investors digest long-anticipated adjustment
- Parts maker expects global light-vehicle output to decline 5%
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Continental AG investors breathed a sigh of relief on Tuesday after a long-expected warning about full-year earnings suggested the German car-parts maker is finally facing up to the deepening slump in global vehicle production.
The shares rose as much as 5.4% after the Hanover-based manufacturer said its profit margin would be narrower than previously forecast and the outlook for the overall market is far gloomier. Automakers and their suppliers are reeling from a significant slowdown in China that kicked in last year and has spilled over into 2019, while demand for cars also appears to be peaking in North America and Europe.