Canadian Plastics

German firms Continental and Osram plan to end lighting systems joint venture

The companies said the move comes in response to the dampening influence of COVID-19 on the global level of vehicle production.

September 29, 2020   Canadian Plastics

Image Credit: Osram Continental GmbH

Germany-based companies Continental AG and Osram Licht AG are dissolving their joint venture business Osram Continental GmbH, a developer of smart automotive lighting systems, and returning the business to the respective companies.

In separate statements, the two parent companies said separation negotiations will conclude before the end of the year. The companies said the move comes in response to the dampening influence of COVID-19 on the global automotive market.

“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 said in its statement. “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 50-50 joint venture was created in 2018 to combine Continental’s expertise in software and electronics with Osram’s automotive lighting portfolio. The JV employs about 1,500 workers at 14 locations around the world. Pending the approval of supervisory bodies, according to Continental, the companies will repatriate employees to either Osram or Continental.

“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,” Continental said. “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.”

The two companies said they will remain connected as partners for the automotive industry, to design and develop lighting solutions and sources for the automotive market.


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