BERLIN -- Continental cut its growth forecast for the production of passenger and light commercial vehicles in 2021 due to a chip supply crunch it sees persisting throughout the year.
The German supplier trimmed its forecast for production to rise 8 percent to 10 percent, down from a previous forecast for 9 percent to 12 percent.
It also cut the upper end of its 2021 sales outlook for its automotive division to 16.5 billion euros ($19.54 billion) from 17 billion.
The company said semiconductors bottlenecks slowed automotive production in the latest quarter.
"In the automotive technologies group sector ... the burden of the chip bottleneck is clearly being felt," CEO Nikolai Setzer said in statement on Thursday.
Continental said sales were 9.9 billion euros in the second quarter and adjusted earnings before interest and taxes (EBIT) were at 711 million euros, compared to a loss of 635 million euros in the same quarter last year.
Continental now sees at least 33.5 billion euros of revenue this year, up from 32.5 billion euros, and at least a 6.5 percent adjusted Ebit margin, up from 6 percent.
For the rubber unit -- with products spanning tires, hoses and industrial conveyors -- Continental raised its estimate for the drag higher raw material prices will have on the business to 500 million euros, from 350 million.
The supply woes idling car plants have led most manufacturers to set conservative expectations for the year even after a strong first half.
BMW this week kept its profit forecast unchanged and Volkswagen warned the constraints will get worse during the second half of the year.
Chip challenges and continued fallout from the pandemic have hit Continental at a time of declining returns that prompted the manufacturer to announce plans last year to cut or transfer some 30,000 jobs.
Bloomberg contributed to this report
