Transformation - Taking Off into the Future

​​​​​​​Transformation means change. The process of changing from our current status to our desired status in the future is not primarily a question of exchanging or replacing existing modes of working, but of responding to current economic and social dynamics.

The word "transformation" comes from the Latin “transformare” (to shape), and above all, is about constantly evolving, responding to opportunities and risks and taking new paths.

Environmental organizations and the climate change movement “Fridays for Future” have led to a shift in thinking about mobility in our society. Every Friday, people all over the world are on the streets, protesting for effective climate protection. The issue poses great challenges for society: While mobility is indispensable for economic development and social life, it also needs to become more sustainable, safer and more comfortable.

Changes in how we move are affecting the automotive industry in particular. The pressure for change will only increase: In an era of growing digitalization, more stringent CO2 values and an electric revolution, the automotive industry is facing new challenges. The combustion engine is being replaced by the electric motor. Who will actively shape the transformation process and who will fall by the wayside will be determined by an ability to adapt to the current changes in good time.

In addition, there is an undeniable uncertainty among consumers: Around five percent fewer cars than 2018 were sold worldwide in the first half of 2019. Since the start of the year, German automobile manufacturers have recorded declining sales of more than 20 percent in the U.S.A. and China. The economy is expecting further falls declines this year as well. The global corona epidemic is significantly increasing this tendency.

Car companies no longer have a lot of time for change: the year 2020 marks a turning point for the industry – particularly in terms of legislation. From 2021, more stringent EU limit values for the CO2 emissions of new cars will apply. On average, the new car fleet of every manufacturer in Europe must not emit more than 95 grams of CO2 per kilometer. Otherwise, fines of 95 euros per additional gram and vehicle are likely to be payable. The German government will reinvest the revenue from the CO2 pricing in climate protection measures or return it to its citizens in the form of relief elsewhere.

This year, most companies are starting major e-car offensives. After all, electric cars in Germany have not as yet achieved a breakthrough in the mass market compared with other European countries, such as Sweden or Norway, despite the increasing number of registrations. In order to achieve the goals of the federal government’s climate protection program, 7 to 10 million electric cars must be on the roads in Germany by 2030. Although there are currently around 24,000 public charging points in Germany – almost 50 percent more than in the previous year – there are still a lot of gaps in the charging network. In order to counteract this, around 50,000 new public charging points are to be created in the next two years to make electric cars compatible with everyday life, and to ensure they can be easily charged in multi-story car parks, underground car parks and at the workplace. Thanks to the introduction of higher purchase premiums of up to 6,000 euros, the federal government wants to make the acquisition of electric cars more attractive.

Transformation is a challenge, even for large suppliers such as Continental. Where diesel and gasoline power transmission technology used to be the primary focus, Continental is now coming to grips almost exclusively with topics of the future, such as assisted, automated and connected driving, the realization of new vehicle architectures and connecting cars to new, high-performance computers, software and data based on intelligent products made of plastic, rubber or electronics, and business with industrial and end customers.

In November 2019, Continental started a global structural program „Transformation 2019-2029“ to accelerate the technology changeover. The aim is to strengthen the company’s competitiveness in the long term. The switch to electro mobility is leading to adjustments and phasing out of production at individual locations worldwide. Ongoing digitalization in the field of display and operating technologies is bringing about a change in the focus of production. Profitable growth areas such as autonomous and networked driving are moving to the forefront, as are services for mobility customers, the tire business and industrial and end-user business. Cars are slowly developing into smartphones on wheels, which are being equipped with an increasing number of driver assistance systems, until they are able to drive autonomously. All of this is changing the automotive industry fundamentally: the factories, the workforce, the processes and the products.

Since October 2019, the fully independent Powertrain division has been working under the name “Vitesco Technologies.” The young, attractive company is a trailblazing pioneer in the field of electronics and electrification, ideally positioned to benefit from the trend towards e-mobility and the growth prospects associated with this transformation. For example, Vitesco Technologies recently also managed to secure a major order from a European vehicle manufacturer for the delivery of innovative electric heating elements for diesel catalysts. This EMICAT brand e-catalyst technology will be used in two of the manufacturer's 48-volt hybrid van models. Start of production for the multi-million contract is scheduled for the end of 2022. The innovative electrical heated catalyst is used to ensure the emission safety of vehicles in accordance with the planned Euro 7 emissions standard. The aim is to substantially reduce the limit values for nitrogen oxides. For Euro 6, these are currently still at 80 mg and 60 mg per kilometer. With Euro 7, only a value of 35 to even just 20 mg of nitrogen oxide per kilometer could be permitted. This is a major obstacle for car manufacturers, which can only be overcome thanks to innovations in the field of alternative drive technologies. The e-catalyst developed by Vitesco Technologies is a form of smart electrification for combustion engines.