REGENSBURG, Germany -- Continental's money-losing powertrain division is seeing signs that its turnaround plan it gaining traction.
"Our sales will be north of 4 billion euros [about $5 billion]," Jose Avila, head of the powertrain division, said at a press event here this month.
The powertrain division, which competes against Robert Bosch GmbH, Denso Corp. and Magna International Inc., had sales of 3.4 billion euros, or about $4.2 billion, last year, down 16 percent from 2008.
Suppliers that can provide innovative and moderately priced powertrain components are poised to win big as automakers race to find ways to meet tougher global emissions standards without sacrificing performance.
A key reason Continental purchased Siemens VDO in December 2007 was to gain access to its German rival's powertrain expertise. Avila told Automotive News Europe that his division is ahead of schedule with its turnaround and promised to meet Continental CEO Elmar Degenhart's target for the unit: to report an operating profit by 2011.
In his speech to Continental shareholders on April 28, Degenhart said he is convinced the powertrain division "will make an important contribution for our company in the future."
Avila agrees: "We are growing in Europe because of the new technologies we have in the powertrain area."
The products include the company's first turbocharger, which will be built by controlling shareholder Schaeffler Group starting in the third quarter of 2011; an electric drivetrain that debuts in 2011 in vehicles by an automaker that has not been publicly identified; and lithium ion batteries that already provide boost and reduced fuel consumption in the BMW ActiveHybrid 7 and Mercedes-Benz S400 Hybrid.
Continental's powertrain division also develops and produces gasoline and diesel injection systems and electronics for engine management.
"These are exciting times to be in powertrain," said Avila, who took over the powertrain division Jan. 1 after 25 years with Delphi. His last job with the parts maker was head of diesel systems, where he spearheaded the launch of the company's common-rail diesel technology.