BONN -- Rheinmetall is exploring strategic options for its automotive division because it may take years for the sector to recover from the coronavirus pandemic.
The German supplier will take a non-cash charge of 300 million euros ($353 million) in the second quarter related to the impairment of its automotive business, the company said Monday.
The writedown is almost entirely related to its hard-parts division, the maker of pistons, bearings and pumps said.
Experts "anticipate significantly lower growth for passenger cars and light commercial vehicles even over the medium term," Rheinmetall said.
Global production probably will drop more than 20 percent this year and may not return to pre-crisis levels before 2024, the company said.
Rheinmetall's automotive sales plunged 53 percent in the quarter, and the division recorded a preliminary operating loss of 52 million euros.
That contrasts with a 21 percent jump in sales for its defense business, which posted a 93 million euro operating profit.