(Bloomberg) -- Continental AG lowered its sales and profit guidance for the year after the global semiconductor-chip shortage intensified in the third quarter to further disrupt vehicle manufacturing.
Group sales are expected to drop to between 32.5 billion to 33.5 billion euros ($39 billion), down from as much as 34.5 billion euros, Europe’s second-largest vehicle parts maker said Friday. Margins will also shrink and are now seen as low as 5.2%.
Raw materials price rises alongside higher electronics as well as energy and logistics costs are also becoming more severe, Continental said.
Industry executives expect the chip shortage to persist well into next year with consultancy AlixPartners predicting global automakers to build 7.7 million fewer vehicles this year alone. While auto suppliers have been hard hit by the crisis, carmakers have mitigated the supply strains by raising prices and steering production to their most lucrative models. Continental rival Faurecia SA cut its sales and profitability forecasts last month.
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