BERLIN -- Continental is seeking deeper cost cuts after second-quarter net profit fell 41 percent, hit by lower vehicle demand in China and steep investments for electric and autonomous cars.
"We are responding to the declining market by ensuring rigorous cost discipline and enhancing our competitiveness," CEO Elmar Degenhart said in a statement.
Net profit declined to 485 million euros ($543 million) while revenue was down 1 percent and came in at 11.26 billion euros.
Weakness in the car industry had already led Continental's rival, ZF Friedrichshafen, to issue a profit warning while Europe's largest supplier, Robert Bosch, expects sales to stagnate this year.
Degenhart, who has been at the helm of the Hanover-based company since 2009, pointed to a "highly challenging" market with falling car sales in Europe, North America and China.
"The resulting need for action is currently being discussed with employee representatives, with the aim of drawing up a plan together in the coming weeks on how to proceed," Degenhart added.
The company did not initially provide details on the volume of the envisaged cuts and where they could occur, while adding it had decided not to build up battery cell production.
Continental sees no economic rebound in the short or midterm, it said. "For the second half of the year, we do not expect the headwind to ease," Chief Financial Officer Wolfgang Schaefer said.
The company confirmed, however, its full-year outlook, which it had lowered last month, citing an expected decline in global vehicle production.
Continental ranks No. 4 on the Automotive News Europe list of the top 100 global suppliers with estimated worldwide sales to automakers of $37.8 billion in 2018.