Inside Continental’s Strategic Transition to AUMOVIO

Q: How is Continental adapting its value proposition to the shift toward electrification and connected mobility?

A: Continental is undergoing a major transformation, splitting into two divisions: Continental Tire and Continental Automotive, soon to be renamed  “AUMOVIO.” This positions us at the forefront of industry change, focusing on new client needs and emerging technologies like AI, zonal architectures, and quantum computing. Driven by customer demand for rapid electrification, we offer technologies for autonomous electric mobility, EV-specific safety, and fully electric braking, serving both electric and combustion vehicles while aligning products with client forecasts.

Despite external pressures, Continental remains firmly committed to sustainability, based on four pillars applied across all operations: achieving carbon neutrality, enabling zero-emissions mobility, implementing a 100% circular economy, and ensuring fully responsible value chains. Continental has seven plants in Mexico, specializing in mechanical or electronic products. We adjust plant capacity and layout to match demand. For example, a plant might manufacture mechanical brake systems for EVs or a stronger version of the same system for combustion engine models. 

Q: How are you ensuring that you focus on what matters most and deliver on your ambitions?

A: To manage the areas within the AUMOVIO division, we have organized our operations into distinct business areas, each with its own strategic focus: user experience (UX) and cockpit systems, vehicle architecture and networking, safety and motion, and autonomous mobility. Each unit manages its portfolio by focusing on market trends, customer needs, and technology roadmaps. Staffed with key talent, they stay aligned with market changes, increasing resources for growing technologies and shifting investments away from those no longer viable.

Q: What strategies support Continental’s goal to hit between €38 billion (US$44.7 billion) and  €41 billion (US$48.3 billion) in sales in 2025? 

A: It is an ambitious goal, especially given the global industry faces. We aim to increase our market share in China, which is one of the most dynamic automotive markets. We also aim to maintain our market share in North America and the European Union, our other two largest markets, by offering more competitive products. Our goal is for all our products to rank number one or two in their categories. If any product does not meet that standard, we will improve it or reconsider whether it belongs in our portfolio.

Q: What are the core priorities of Continental’s R&D efforts in Mexico? 

A: We have three automotive development centers with over 1,500 employees focused on the North American market. They develop sensors, AI, and autonomous mobility technologies, including safe braking algorithms and passive detection systems that help vehicles avoid accidents. We also work on advanced vehicle architectures to enhance communication between cars, devices, and traffic infrastructure. 

For example, last year we tested a device that collected city traffic data. This allowed us to develop new algorithms to improve communication between vehicles and city infrastructure, helping drivers make safer and more efficient decisions. Our objective is to establish ourselves as a key global player in future mobility, including leading developments in software-defined vehicles.

Q: What strategies has Continental deployed to address talent challenges in the region?

A: A key challenge is the existing skill gap between graduates and our hiring needs, especially in specialized engineering, English proficiency and soft skills like autonomy and teamwork are also lacking. To bridge this, we partner with groups like CANIETI for apprenticeships and run internal programs tailored to the automotive industry, including specialized diplomas in cybersecurity and functional safety developed with ITESO and Universidad de Guadalajara.

Another challenge is continuous education. Technology changes quickly, so we use long-term forecasts to identify which competencies will be needed in the next one to five years and tailor our training accordingly. About 85% of engineers’ work has changed over the past decade, and this pace of change is expected to accelerate.

Q: Which of Continental’s seven automotive plants in Mexico plays a more prominent role in your strategy?

A: The facility in Aguascalientes, inaugurated in 2021, incorporates our most advanced production technology, specializing in electronics manufacturing, particularly control units that serve as the central computing systems for new vehicle models. This plant supports nearly all North American automotive clients, spanning the full range from luxury to entry-level vehicles. Our plants in Mexico have performed well overall, despite challenges such as tariffs and fluctuating customer demand, which have required adjustments in supply chains and cost structures. We have maintained operational stability and avoided widespread layoffs.

Q: What specific criteria does Continental require from Mexican suppliers? What certifications or processes must they possess to be considered?

A: Our suppliers must be willing to comply with automotive industry standards. Certifications such as ISO/TS 16949 and equivalent are mandatory, but these alone are insufficient. Increasingly, sustainability certifications, including ISO 14001 have now become essential. Beyond certifications, we value commitment to Mexico’s growth, responsive local service, and innovation to improve efficiency and competitiveness.

While Mexico continues to be viewed as a cost-effective manufacturing hub, the cost advantage has diminished over time. Other countries are becoming more competitive, which makes continuous improvement crucial. Without collaboration and innovation, there is a risk that investments may shift to other regions.

Q: How is Continental proactively driving change in the automotive industry?

A: We attempt to proactively lead the transformation of the automotive industry. By spinning off and focusing exclusively on the automotive business, we are aiming to place ourselves at the heart of its transformation. Our new slogan is “The Adaptive Powerhouse of Future Mobility” because adaptability is a core value in this journey. We want to be protagonists in this shift, introducing new technologies and solutions that may become industry standards. Whether we succeed is uncertain, and we will likely need to pivot along the way. 

Q: What steps is Continental taking to safeguard the human capital it has built over decades?

A: AI will not replace highly specialized talent. If anything, it is more likely to replace entry-level or repetitive tasks. Our approach is to leverage AI to enhance efficiency by automating routine processes, so our experts can focus on higher-value tasks. We encourage all employees, regardless of experience, to explore AI tools and learn how to use them effectively. Younger engineers excel with AI tools but may lack customer insight, while experienced professionals provide crucial industry knowledge. We aim to blend AI skills with expertise for effective collaboration.