FRANKFURT AM MAIN, Sept 2 — German car components giant Continental said today it was considering spinning off completely its powertrain division, alongside the already-mooted option of a partial market flotation.

The board “decided to consider the possibility of a spin-off... in parallel with the company’s ongoing preparations for a potential partial IPO of the division,” the group said in a statement.

Continental pointed to “an accelerating trend toward powertrain electrification and the hard-to-predict conditions” that could meet a flotation in 2020 as reasons for the shift in its thinking.

The Hanover-based company had originally planned a partial flotation for the second half of this year.

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But in April it pushed back the date for the separation, which will see the unit — which also makes electric motors — renamed “Vitesco”.

Germany’s car sector is being buffeted by headwinds from the US-China trade war, Brexit and a broad slowdown in economic growth in part caused by such geopolitical factors.

Continental lowered its annual financial forecasts in July, predicting the global auto market could fall back by up to five per cent.

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Selling off Vitesco in whole or in part would be one element in a wider restructuring Continental launched in July 2018, which will see it separated into units making tyres, car chassis and powertrains.

Like other formerly centralised German conglomerates including Thyssenkrupp or Siemens, the individual divisions will have broad freedom to manage their own affairs.

In Frankfurt, Continental shares gained 0.1 per cent to trade at €109.86 (RM508.17) around 4:00pm (1400 GMT), in line with the DAX index of blue-chip shares. — AFP