German auto parts and tyre maker Continental AG forecast sales would rise more than 5 percent this year to more than 32 billion euros ($43 billion) as Asian and North American demand offsets a weaker Europe, keeping the global car market growing.
Continental expects global auto production to rise 1 percent to 77 million vehicles this year, the company said on Thursday.
It also aims to maintain its operating profit margin of 10.1 percent, compared with 9.4 percent at the world's No. 2 tyremaker, Michelin SCA. "We aim to grow faster than our key markets," Chief Executive Elmar Degenhart said at a news conference at the company's headquarters in Hanover, northern Germany on March 1.
Degenhart said he expected first-quarter sales to rise to more than 7.9 billion euros from 7.3 billion a year earlier. Strong demand for vehicles in China and the US, the world's two biggest auto markets, is spurring profits at German car makers and parts suppliers, compensating for sacrifices in Europe. Auto production in the 17-member euro zone may shrink 5 percent to 19 million units this year, Continental said.
Michelin raised its 2015 profit goal last month, encouraged by demand from European and US truckmakers and a strong market for the outsized tyres used in the mining industry. Degenhart also said the newly formed global alliance between General Motors Co and PSA Peugeot Citroen may enable Continental to win more business as it counts the French group, Europe's second-biggest carmaker, among its top 10 global customers.
"We believe we can extend our footprint in a joint partnership between GM and PSA," the CEO said, noting that the world's biggest car maker ranks among its top three global customers. "It's a good move for the supplier base."
Continental's fourth-quarter earnings before interest and tax (EBIT) rose 18 percent to 680.2 million euros, more than the 654 million euro average estimate in a Reuters poll. Global sales rose 17 percent last year to 30.5 billion euros.