FRANKFURT (Reuters) -- Volkswagen's emissions test-cheating scandal could kill nascent markets for diesel cars in North America, Japan and China, Continental CEO Elmar Degenhart told a German newspaper.
"The diesel passenger car could sooner or later disappear from these markets," Degenhart said in an interview with markets daily Boersen-Zeitung published on Thursday.
He said diesel had a market share of only 1 percent to 3 percent in these countries, compared with 53 percent in Europe.
Volkswagen had been promoting diesel as a clean alternative to gasoline in the U.S., a market where it was struggling for a breakthrough, before the cheating came to light in September.
Degenhart said Continental had not supplied any software to manipulate emissions tests to any of its clients, reiterating what a company spokesman told media in October.
"We developed and supplied the engine controllers in line with VW's specifications. The installation and tuning of the software, the so-called calibration, was done by VW," he said.
He added that Continental was not aware of any legal investigations against it in connection with the scandal.
Staff at Continental's rival Robert Bosch, the world's biggest automotive supplier, are being investigated by public prosecutors in the German city of Stuttgart to find out whether they were involved in VW's test-rigging.
New business areas
Continental is striving to build up its software, electronics and sensors business, which is already bigger than its core tires business, as carmakers demand services such as mapping and traffic information for Internet-connected cars.
"The likelihood that we will begin to support the building of this new business with acquisitions is relatively high," Degenhart said, adding that large acquisitions were possible but unlikely in this area and not currently planned.
He added that Continental had not given up on the development of electric car batteries despite a joint venture with South Korea's SK Innovation ending last year.
"We are convinced that it is only a matter of time before electromobility, and there I include hydrogen power in the long term, prevails," Degenhart said.
But he said the price would have to fall below 100 euros ($109) per kilowatt hour of storage capacity from 250-300 euros currently for electric cars to succeed.
Asked what he would do to keep shareholders happy, Degenhart said he did not rule out raising Continental's dividend payout ratio in coming years from 15-30 percent of net profit currently.
Last month, Continental's finance chief, Wolfgang Schaefer, said the scandal was having little effect on diesel markets in the U.S. or Europe.