Over the first nine months of the year, sales were down 4.5%, while operating profit remained stable. This is against the backdrop of an automotive market that deteriorated very sharply in the third quarter, particularly in the USA and China, where the declines are - in percentage terms - in double figures.

The first waves of redundancies are already underway, with 3,000 jobs slashed by 2024, half of them in R&D. As usual at Continental, it's the tire segment that's holding up best, keeping the company afloat. It accounted for 94% of consolidated operating profit last year, and 96% over the three quarters to 2024.

Once stable and satisfactory, the Group's business has suddenly deteriorated since 2018. Overly stringent European regulations and the tidal wave of low-cost Asian competition have weighed heavily on Continental's margins, which have halved in the space of a few years.

The Hanover-based group has been in a state of permanent restructuring ever since. In 2021, it began the big maneuvers by spinning off Vitesco, before Schaeffler AG bought Continental's former Powertrain and Propulsion Technologies segment.

The aim now is to divest the automotive segment - with its derisory if not negative profitability - and reposition itself as a pure player in tires. The calculation is quickly made: at the same profit multiple as that assigned to Pirelli or Michelin, the German company's tire segment covers its entire enterprise value of EUR17 billion.

As such, the automotive segment counts for zero in its valuation. Unfairly perhaps, since it focuses on braking systems and in-cabin displays, it is unaffected by the transition to electric vehicles. This asset should therefore find a buyer, even if it would ideally require a less gloomy market context than at present to generate a satisfactory amount.

MarketScreener analysts would not be surprised to see an offer from Asia materialize very soon. A tough restructuring plan could follow in its wake.