Difficult market situation to see Continental and Osram repatriate lighting systems JV

Around two-and-a-half years after Continental and Osram confirmed their new JV to leverage their expertise in lighting and electronics, the Continental Executive Board has decided to repatriate the joint venture with Osram. Continental and Osram each have a half share in the joint venture, which was founded in 2018 and specializes in intelligent lighting systems for automobiles. The two companies are currently holding talks that should be concluded by the end of the year.

The joint venture will then be dissolved. The current negotiations are tackling the issue of how the capital/assets contributed by each company should be separated, including a total of 1500 employees at 14 locations, who will be repatriated to the participating companies. With this step, Continental and Osram are responding to the difficult market situation caused by the continuing, low global level of vehicle production and the economic crisis, which was exacerbated by the effects of the coronavirus pandemic.

Continental does not expect global vehicle production to return to 2017 pre-crisis levels before 2025 – and against this current backdrop, the former joint expectations of profitable growth for the joint venture can no longer be realized. The decision on the possible repatriation is subject to the approval of the competent supervisory bodies.

Through a future cooperation agreement, the companies plan to stay connected to their automotive industry customers. The future will see new lighting solutions based on the close interaction of electronics, software functionality and modern LED lighting sources. In order to ensure that the resulting innovations and projects go into serial production on time, the two companies will jointly ensure the continuity of project implementation and the necessary expertise for their automotive customers. Existing customer relationships will therefore not be affected by the current negotiations or their outcome. Obligations entered into and orders received to date will of course be fulfilled by both companies.