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Aumovio SE: From Continental's Automotive Division to Independent Future Mobility Company
I. Introduction & Episode Roadmap
The scene unfolds in a Frankfurt boardroom, September 2025. The ceremonial bell rings at the Frankfurt Stock Exchange, and for the first time in over 150 years, a company born from German industrial heritage begins trading as something entirely new. The ticker reads AMV0.DE. The company: Aumovio SE—a name that didn't exist six months earlier, yet carries the DNA of one of the world's most consequential automotive technology transformations.
How does a rubber company founded in 1871 to make hoof buffers for horses eventually give birth to a €3.5 billion publicly traded technology company focused on software-defined vehicles and autonomous mobility? The answer lies in a story spanning acquisitions worth tens of billions of euros, a hostile takeover that nearly bankrupted two industrial giants, multiple spin-offs, and the relentless march of automotive technology from mechanical systems to electronic brains.
On September 18, 2025, AUMOVIO SE (AUMOVIO), formerly the Automotive group sector of Continental, successfully launched as an independent company with the start of trading on the Frankfurt Stock Exchange. This technology and electronics company offers a wide-ranging portfolio that makes mobility safe, exciting, connected, and autonomous. This includes sensor solutions, displays, braking, and comfort systems, as well as comprehensive expertise in software, architecture platforms, and assistance systems for software-defined vehicles.
In the fiscal year 2024, the business areas, which now belong to AUMOVIO, generated sales of 19.6 billion Euro. The company is headquartered in Frankfurt, Germany and has over 86,000 employees in more than 100 locations worldwide.
This is a story about acquisitions, hostile takeovers, restructuring, and ultimately, independence. It touches on the German automotive supplier ecosystem, the software-defined vehicle transition, stakeholder capitalism, and the art of corporate spin-offs as value creation mechanisms. At its heart, it's about how industrial companies navigate generational technological transitions—and whether breaking up can sometimes be the path to building something greater.
For investors, the Aumovio story poses a fundamental question: Can a company shed the conglomerate discount, escape the gravitational pull of legacy businesses, and unlock value through independence? The German industrial establishment certainly hopes so.
II. Continental Origins: The Foundation (1871–1990s)
The year is 1871. Germany has just unified under Bismarck's leadership. In Hanover, a group of entrepreneurs recognizes that the expanding industrial economy needs rubber—lots of it. Continental was founded in 1871 as a rubber manufacturer, Continental-Caoutchouc und Gutta-Percha Compagnie.
In its early days, Continental produced parts made of soft rubber, such as hoof buffers for horses. From the outset, the strategic focus has always been on diversity and innovation. The company's first major products were delightfully anachronistic by today's standards: rubberized fabrics, solid tires for carriages and bicycles, and industrial rubber goods. It was by no means the first German rubber company; several small firms had been active in Hanover in the previous decade.
But Continental had something its competitors lacked: an instinct for the next big thing. In 1892, Continental began development and production of pneumatic bicycle tires, which was a major success for the brand. More significantly, in 1892 Continental commenced the manufacture of pneumatic tires for bicycles to cater to the growing interest in cycling. Although less innovative than Dunlop or Michelin, in the 1890s Continental was the first German producer of pneumatic tires.
The 1890s transformed Continental's fortunes. The 1890s proved more profitable than the previous decade. Continental's gross profit rose from 485,821 marks in 1891 to 1.8 million marks by 1898, and dividends were 55 percent annually between 1896 and 1898. The firm's capitalization was increased in 1897, doubled again two years later, and totaled 3 million marks by 1901.
Then came the automobile. In 1904, Continental became the first company in the world to manufacture grooved vehicle tires. Another major product Continental invented was a detachable wheel tire that was made for touring vehicles (1905). This wasn't just product innovation—it was positioning Continental at the epicenter of a transportation revolution.
From about 1910, synthetic rubber started to play a major role in car tire production, and one of its earliest proponents was chemist Albert Gerlach (1858–1918), member of the executive board. World War I and its aftermath disrupted operations severely, but Continental's ability to experiment with synthetic rubber during wartime shortages—in 1909 Continental had produced a few tires using synthetic rubber supplied by the Bayer laboratories—demonstrated an R&D culture that would serve the company for generations.
In the late 1920s, Continental merged with several other major rubber industry companies to form the largest rubber company in Germany called Continental Gummi-Werke AG. The company survived the Nazi era, underwent post-war reconstruction, and by the 1980s was making strategic moves that would reshape its future.
Long established as the leading tire producer in Germany, Continental AG attained international prominence through a series of major acquisitions in Europe and in the United States starting in 1979. By 1991 Continental was the fourth largest tire producer in the world. After weathering considerable economic pressures in the early 1990s, the company began making significant strides to secure a competitive position in the more lucrative arena of auto components.
The 1990s marked a pivotal strategic inflection. In 1995, von Grunberg established Continental's Automotive Systems division to pursue research and technology in automotive electronics, which promised much higher profit margins than tires. This wasn't a casual diversification—it was a deliberate bet that the future of mobility would be electronic, not mechanical.
One of the key innovations of this group, introduced in 1997, was an electromechanical brake system called the Integrated Starter Alternator Damper (ISAD). The ISAD received widespread praise and garnered the German Industry's Innovation Award.
In 1998 Continental broadened its investment in auto components with the $1.93 billion purchase of ITT Industries' brake and chassis business. This acquisition would prove fatefully significant—the head of ITT's brake division at the time was Juergen M. Geissinger, who would return to Continental a decade later under very different circumstances.
For investors, this foundational period reveals Continental's core DNA: a willingness to cannibalize existing businesses, bet on technological transitions, and use acquisitions as strategic weapons. The company that started making hoof buffers had transformed itself multiple times—and the biggest transformations were yet to come.
III. The Acquisition Spree: Building an Automotive Electronics Giant (1998–2007)
By the early 2000s, Continental's management had diagnosed a fundamental problem: tires were a commodity business with thin margins and brutal competition. Automotive electronics—brakes, safety systems, powertrain controls—offered far superior economics. The solution? Build or buy capability, fast.
In 2001, Continental acquired a controlling interest in Temic, DaimlerChrysler's automotive-electronics business, which is now part of Continental Automotive Systems. The company also purchased German automotive rubber and plastics company Phoenix AG in 2004, and the automotive electronics unit of Motorola in 2006. Continental acquired Siemens VDO from Siemens AG in 2007.
The Temic acquisition in 2001 was strategic genius disguised as industrial housekeeping. DaimlerChrysler was restructuring, and Continental swooped in for $570 million to purchase a controlling interest in DaimlerChrysler's Temic auto-electronics business. The objective was to gain strong competitive position in the fast-growing market for electronic stability programs (ESPs).
Technologies (Temic 2001) have transformed Continental from a pure rubber based manufacturer into a leading automotive technology supplier. With the acquisition of Phoenix in 2004, Continental became one of the world's largest non-tire rubber product manufacturers.
The Motorola acquisition in 2006 expanded Continental's North American footprint and telematics capabilities. The purchase price was agreed at 1 billion US-Dollar. In 2005, Motorola's automotive electronics business had generated profitable annual revenues of approx. 1.6 billion US-Dollar, of which more than 2/3 are allocable to the NAFTA-Region. The business employs approx. 4,500 employees at their main production and engineering facilities in the USA, Mexico, France and China. It produces and supplies electronic control units for the power train, for chassis control and for interior applications.
But it was the Siemens VDO deal that truly transformed Continental—and nearly destroyed it.
The Siemens VDO Deal: A Transformative Gamble
In the largest acquisition in the history of auto suppliers, Siemens AG said today it will sell its Siemens VDO Automotive parts unit to German rival Continental AG for $15.66 billion, or 11.4 billion euros.
On July 25, 2007, after almost half a year of weighing strategic and financial alternatives, the technology conglomerate Siemens AG agreed to sell its automotive supply division ("Siemens VDO Automotive") to the German-based automotive supplier Continental AG. At a value of EUR 11.4 billion (USD 15.7 billion), this acquisition represented the largest in Continental's corporate history as well as in the automotive supply industry up to that date. The combined firm ranked among the five largest automotive suppliers in the world, within reach of the few industry leaders. From the perspective of its management board, engaging in this significant transaction carried an opportunity not only to realize synergy potentials, but, more importantly, to meet industry trends by expanding Continental's market position.
On the basis of 2006, Continental and Siemens VDO realize aggregate annual sales of around 25 billion euros with a workforce of close to 140,000. Thus, Continental advances to a position among the top five worldwide in the automotive supply industry.
Continental's chairman Manfred Wennemer articulated the strategic vision: "In buying Siemens VDO Automotive AG, Continental is taking the logical next step in its evolution to full-range, integrated systems supplier." He noted that the purchase was the latest in a string that began with Teves in 1998, and more recently, the acquisition of Temic, Phoenix AG and the automotive electronics business of Motorola Inc.
Continental says about €19.1 billion of total revenue is tied to the original equipment automotive sector, ranking the merged company No.5 on the list of global automotive suppliers. Continental says about €19.1 billion ($26.2 billion) of total revenue is tied to the original equipment automotive sector (including €10.0 billion [$13.7 billion] from Siemens VDO), which ranks the merged company No.5 on the list of global automotive suppliers behind Robert Bosch GmbH, Denso Corp., Delphi Corp. and Magna International Inc.
Continental anticipates a net synergy potential in the order of at least €170 million a year as of 2010. Assuming no delays in antitrust clearance, closing of the transaction should occur towards the end of the fourth quarter. Integration will be concluded by the end of 2009.
The product portfolio complementarity was undeniable. Wennemer says there are no plans to sell off Continental's tire operations. Core product sectors for Siemens VDO include fuel injectors, electronic throttle controls, air induction systems, instrument gauges, radio head units, navigations systems, sensors, electric motor drives and a vast array of other electronic components.
Wennemer says the new Continental will benefit from pooled know-how in such system technologies as driver assistance, environment sensors, telematics and electronic brakes. It also will be able to better exploit its position in the market for electric motors and other hybrid-electric vehicle technology and engine and transmission management systems, he says. "At the same time, we are significantly expanding our market position in Europe, North America and Asia."
But the deal had a hidden time bomb: Continental, based in Hanover, borrowed heavily in 2007 to carry out a seven-billion-euro takeover of Siemens' car parts unit VDO. Just as Continental was digesting the largest acquisition in automotive supplier history, the global financial crisis was about to hit.
For investors, the Siemens VDO acquisition represents the classic M&A dilemma: strategic brilliance executed at the wrong moment. The deal created a world-class automotive electronics company, but the debt load made Continental vulnerable—a vulnerability that wouldn't go unexploited.
IV. The Schaeffler Hostile Takeover: Crisis & Transformation (2008–2012)
In mid-2008, Continental's integration of Siemens VDO was proceeding according to plan—but the company's stock price told a different story. In 2008, Continental appeared overextended with its integration of VDO and had since lost almost half of its market capitalisation when it found itself to be the hostile takeover target of the family-owned Schaeffler AG.
In order to become the world leader in the automotive components industry, on 15 July 2008, Schaeffler launched a bid to acquire publicly-held Continental AG, the world's six-largest automotive components supplier.
The audacity of the move cannot be overstated. After fiercely opposing the bid, Continental ultimately accepted Schaeffler's offer, but compelled Schaeffler to sign an investment agreement which was largely in its favor. Schaeffler's bid was a bold move, considering the fact that it was nearly three times smaller than Continental.
This caused a slump in its share price, making it cheaper to buy for any predator. Schaeffler, controlled by 66-year-old Maria-Elisabeth Schaeffler and her son Georg Schaeffler, saw its chance and in July made an audacious offer to buy Continental despite Schaeffler only being a third of its size.
In August 2008 and after a protracted standoff, Continental agreed to be taken over by the Schaeffler Group in a deal that valued the company at approximately €12 billion. Schaeffler in return agreed to limit its position to less than 50% for a period of four years and support Continental's ongoing strategy. This arrangement was overseen by former German Chancellor Gerhard Schroeder. Continental's CEO Manfred Wennemer, who had opposed Schaeffler's offer, resigned.
Family owned Schaeffler had to raise its offer to 75 euros (US$111.15) per share from 70.12 euros and has had to pledge not to own more than 49.99% in Continental for four years, a Continental statement said.
The timing was catastrophic. During the time of the Schaeffler takeover of Continental both organizations were saddled with significant levels of debt. Schaeffler's debt grew to EUR12 billion (USD15.6 billion) after the company was faced with more shareholders willing to sell it stock than it initially expected when it made its offer for the company.
For its part Continental incurred around EUR10 billion during an earlier takeover of the VDO automotive components unit of Siemens VDO. During the height of the financial crisis it looked as through the combined debt burden of both companies could lead to the potential for the banks taking control of both firms. But both firms have subsequently enjoyed robust financial results and their liquidity has improved, with Continental's net indebtedness declining to a far more manageable EUR5.3 billion by the end of 2012.
As a result of all the recent share trading, Schaeffler Group holds 49.9 percent of the voting stock of Continental AG and is therefore the company's largest shareholder. At the peak of the complicated transaction, Schaeffler Group held up to 90 percent of Conti stock, although Schaeffler has now transferred the additional shares tendered to financial institutions.
The human drama was equally intense. Less than one year later, Schaeffler's CEO Juergen Geissinger succeeded in installing his longtime confidant (and former leader and later head of ITT Teves/Continental Brake and Chassis Division) Elmar Degenhart, the head of his automotive division, as the new chief executive of Continental, ousting Neumann.
This brings the story full circle. Remember Juergen Geissinger, the head of ITT's brake division when Continental bought that business in 1998? When Continental decided to purchase ITT Industries' brake and chassis business for US$1.93 billion in 1998, the head of ITT's brake division, Juergen M. Geissinger, was hired as the CEO of the family-owned bearing and auto parts manufacturer Schaeffler Group. Ten years later, Geissinger returned to Continental with mother-and-son owners Maria-Elisabeth and Georg Schaeffler and a consortium of banks, to buy control of the company.
The recovery was remarkable. On 6 September 2012, Continental returned to the benchmark DAX index of 30 selected German blue chip stocks after a 45-month absence.
Continental's net indebtedness declining to a far more manageable EUR5.3 billion by the end of 2012. Schaeffler for its part has also reduced its debt level to EUR6.8 billion in the same period, so both firms are on a more stable financial footing.
For investors, the Schaeffler saga offers profound lessons about the dangers of over-leverage during M&A, the importance of timing, and the resilience of well-managed industrial companies. Continental survived what should have been a fatal combination of debt, financial crisis, and hostile takeover—emerging stronger and more focused.
V. The Modern Continental Automotive Division (2012–2024)
With the crisis behind them, Continental's management turned to the next strategic question: How should a Tier 1 automotive supplier position itself for the software-defined vehicle era?
The company pursued a two-track strategy: organizational restructuring and targeted technology acquisitions.
Continental purchased Elektrobit Automotive GmbH in 2015, a specialist in innovative software solutions. With the purchase, the international automotive supplier, tire manufacturer, and industrial partner Continental is further expanding its systems and software expertise for solutions in the automotive industry. Elektrobit Automotive is a specialist in highly innovative software solutions. At Elektrobit Automotive (including its joint venture company e.solutions GmbH), some 1,900 professionals develop powerful solutions for complex vehicle functions regulated by software, such as advanced driver assistance systems and infotainment systems. With this acquisition, Continental is strengthening its development capacity and boosting its technology development of systems for automated driving.
German automotive giant Continental AG acquired Elektrobit Automotive GmbH for €600 million ($677.5 million) in 2015 to meet the growing demand for electronics and safety technology.
Continental built a driverless test vehicle called CUbE – Continental Urban Mobility Experience – which it trialed in Frankfurt, Germany.
The organizational evolution accelerated. In 2021, Continental made its first major spin-off decision: Vitesco Technologies, the powertrain division.
In view of the fundamental changes taking place in the automotive industry, the executive board of Continental AG resolved in 2018 on a strategic realignment which included the operational and organizational separation of the business of the former Powertrain division. In 2019, Continental's Executive Board then took the strategic decision to spin-off of the business activities of the Powertrain business area and transfer the business to Vitesco Technologies.
The annual general meeting of Continental AG approved the spin-off on April 29, 2021. As consideration for the spin-off, the Continental shareholders will be allocated shares in Vitesco Technologies proportionately to their participation in Continental AG.
Shares in German auto parts manufacturer Vitesco Technologies rose 12% in their market debut on Thursday, which marked the company's long-awaited spinoff from former parent Continental.
Vitesco was spun out of Continental in 2021 with a share price of €59.80. IHO Holding is the strategic management holding of the Schaeffler family and already owns 49.9 percent of Vitesco and Continental.
The Vitesco spin-off signaled Continental's strategic direction: shed the powertrain business (increasingly commoditized and facing electrification headwinds) and focus on higher-margin electronics, safety systems, and software.
But challenges mounted. In February 2024, Continental AG cut around 7,150 positions in its auto unit. The automotive supplier industry faced semiconductor shortages, rising costs, and intense competition from both traditional rivals and new entrants.
For investors, the 2012-2024 period demonstrates Continental's continuous strategic evolution—from crisis survival to proactive portfolio management. The Vitesco spin-off proved the template for what would become the much larger Aumovio separation.
VI. The Spin-Off Decision: Birth of Aumovio (2024–2025)
The decision to separate Continental's Automotive division into an independent company emerged from a fundamental strategic question: Could the automotive electronics and safety business thrive better on its own?
December 18, 2024 The Continental Executive Board informed the Supervisory Board at a meeting today of its decision and concrete plan to spin off the Automotive group sector.
Subject to the approval of the Supervisory Board in March 2025 and resolution by the Annual Shareholders' Meeting of Continental AG on April 25, 2025, the current plan is to complete the spin-off of Automotive as a European company (Societas Europaea, SE) listed on the Frankfurt stock exchange by the end of 2025.
Continental AG Approves Spin-off of Automotive and Makes Decisions on Capital Resources and Future Dividend Policy · March 12, 2025 At its meeting today, the Supervisory Board of Continental approved the planned spin-off of Automotive and is recommending that the 2025 Annual Shareholders' Meeting also approve this step.
The financial architecture was carefully constructed. AUMOVIO is set to start its independence with a strong balance sheet and no financial debt. As of June 30, 2025, the company has cash funds of €1.5 billion and a credit facility of €2.5 billion and remains committed to maintaining solid capital resources and improving cash flow.
The Naming & Launch
Continental group sector Automotive presented its future name today at Auto Shanghai. The independent automotive company will be named Aumovio. The name of the new company combines the strong market position, heritage and technological expertise in the automotive industry with the ambition to shape the mobility of the future with innovations.
The brand was officially unveiled on April 23, 2025, at Auto Shanghai 2025 – a significant step that underlines the relevance of the Asian market and the company's 'in the market, for the market' approach.
CEO Philipp von Hirschheydt articulated the strategic vision: "As an independent company, we gain significantly more creative power and speed. Aumovio will be characterized by a triad of technologically leading products, a consistent value creation strategy and a global synergetic network, combined with a strong local presence for our customers. Our aim is to further expand our position in the future fields and growth markets of mobility."
The annual general meeting of Continental AG approved the Spin-off on April 25, 2025. The Spin-Off will lead to two fully independent companies. CONTINENTAL AG shareholders will receive one share in AUMOVIO SE for every two CONTINENTAL AG (CONG.DE) shares held at the time of the Spin-Off, i.e. a share allocation ratio of 2:1.
The IPO
AUMOVIO SE (AUMOVIO), formerly the Automotive group sector of Continental, successfully launched today as an independent company with the start of trading on the Frankfurt Stock Exchange. AUMOVIO is a leading global provider of hardware and software solutions for vehicles and holds a strong position in the key growth segments shaping the future of mobility. Backed by a broad international customer base, AUMOVIO is committed to value-driven growth. The technology and electronics company has improved its profitability with an adjusted EBIT margin of 2.7 percent in the first half of 2025. AUMOVIO is ideally positioned to create added value for all stakeholders. The company's shares opened trading at €35.00, representing a market capitalization of €3.5 billion.
Shares were distributed to Continental AG shareholders at a ratio of one AUMOVIO share for every two Continental shares, totaling approximately 100 million shares.
Aumovio will start with approximately €1.5 billion in cash and access to a €2.5 billion credit facility. Its order backlog is valued at about €19.3 billion.
For investors, the Aumovio spin-off represents a clean separation with substantial financial flexibility. The company enters independence without legacy debt, strong liquidity, and a clear strategic mandate—unusual for spin-offs of this magnitude.
VII. Aumovio Today: Products, Structure & Strategy
Aumovio operates across four principal business areas, each targeting high-growth segments of the automotive value chain.
With more than 100 years of experience in vehicle safety, the Safety and Motion (SAM) business area is one of the global market leaders in brake systems, integrated safety systems and sensor systems. The business area is a pioneer in developing dry brake systems and was one of the first suppliers to receive a high-volume order for a semi-dry brake system. AUMOVIO sees tremendous potential for the future in these brake systems due to their improved product characteristics.
In the User Experience (UX) business area, AUMOVIO is a leading provider of display solutions and head-up displays. UX has a broad and diversified portfolio ranging from modern high-tech displays to competitive products for the high-volume market. UX expects the value of components installed per vehicle to increase in the future, driven by larger displays and new products such as scenic view head-up displays that extend across the full length of the dashboard.
The Architecture and Network Solutions (ANS) business area addresses the core requirements of software-defined vehicles. AUMOVIO offers a comprehensive portfolio with cutting-edge electronics solutions and innovative technologies for software-defined and autonomous vehicles. Complementing our strong market position with innovative sensor solutions and displays as well as technologically leading brake and comfort systems, the company has extensive expertise in software, architecture platforms, and assistance systems – covering all core requirements for the rapidly growing future market of software-defined and autonomous vehicles.
Leadership Structure
The executive team reflects deep automotive industry experience. Boris Mergell, Jean-François Tarabbia, and Ismail Dagli will lead major business areas on the Executive Board. Mergell will lead Safety and Motion. Tarabbia will lead Architecture and Network Solutions. Dagli will lead Autonomous Mobility.
Each of the three leaders has over 20 years of automotive industry experience. They have led research and development teams and managed major business units for many years.
CEO Philipp von Hirschheydt brings a diverse background. After graduating in economics, he began his career as a financial analyst at WestLB's investment banking subsidiary in 2002, where he became vice president of corporate finance in 2005. In 2007, von Hirschheydt joined Continental as a project manager in the Mergers and Acquisitions department. In 2009, he took over various responsibilities in the former powertrain business, before spending three years in charge of the tire business in Ecuador and a further three years managing the tire business in Shanghai from 2012. In 2018, he returned to Germany to take over the management of the European replacement business in the Tires group sector. Following Continental's organizational realignment in 2022, he became head of the User Experience business area in the Automotive group sector and a member of the Automotive Board.
Innovation Highlights
Aumovio's scalable, modular system, Xelve, is one such technology. Comprising hardware and software, the solution has been developed for Level 2 to Level 4 functions and can be customized for vehicles ranging from the high-volume to premium segments. The solution offers automated parking functions with Xelve Park; AI-supported decision-making with Xelve Drive; and Level 4 automated driving through Xelve Pilot.
Xelve is performance- and cost-optimized and can be flexibly customized for vehicles ranging from the high-volume to premium segments. Thanks to Xelve, vehicle manufacturers can put assisted and automated driving functions into series production more quickly and efficiently.
The Green Electric Caliper was developed for the often large, narrow wheel rims which are fitted on electric vehicles and is optimally designed to meet the requirements of modern, modular vehicle platforms. It does not require hydraulic fluid and is lighter compared to standard electric calipers which leads to an increased range. The residual drag torque is lower than that of conventional hydraulic brake calipers. For OEMs, the product will help to lower material costs compared to standard electric calipers, simplify assembly processes and provide greater flexibility in vehicle architectures.
At this year's IAA, Aumovio will present an integrated "Road to Cloud" platform for software-defined vehicles. This solution provides a complete infrastructure from a single source, enabling automotive manufacturers to develop and operate safe, innovative and connected vehicles. With scalable server zone architectures, Aumovio covers all vehicle segments – from entry-level models to premium vehicles. The platform comprises standardized operating systems, middleware, over-the-air updates and cybersecurity, offering vehicle manufacturers maximum flexibility when designing their individual vehicle architectures.
Financial Targets
Specifically, AUMOVIO plans to boost its sales to over €24 billion in the long term (2024: €19.6 billion). In the medium term, AUMOVIO aims to generate sales of €20 billion to €22 billion, an adjusted EBIT margin of around 4.0 to 6.0 percent and a return on capital employed (ROCE) of around 12 to 15 percent.
AUMOVIO expects the value per vehicle in the product segments for which the company offers solutions to grow by an average of 4 to 5 percent annually until 2029. With a clear focus on high-growth and value-enhancing technologies for software-defined vehicles, AUMOVIO is driving the development of safe, exciting, connected and autonomous mobility worldwide. In the long term, the company is targeting an adjusted EBIT margin of 6.0 to 8.0 percent (2024: 2.5 percent).
By leveraging synergies in development work, standardization and process optimization, centralizing purchasing and improving supply chains, the goal is to improve research and development, make it more efficient and harness business areas' full potential. In turn, the aim is to reduce the R&D ratio (the ratio of research and development expenditure to sales) to below 10 percent by 2027 and to less than 9 percent in the long term.
The IHO-Group, the strategic investment arm of the Schaeffler Group, holds about 46 percent of the outstanding shares, providing stable institutional backing. AUMOVIO's medium-term dividend policy commits to returning 10 to 30 percent of net income to shareholders, signaling confidence in future earnings.
For investors, Aumovio's product portfolio and financial targets represent a company positioned at the intersection of automotive electronics' most attractive growth vectors. The question is execution—can management deliver margin expansion while maintaining competitive R&D investment?
VIII. Ownership Structure & The Schaeffler Connection
The ownership structure of Aumovio reflects the legacy of the 2008 Schaeffler takeover of Continental—and creates unique governance dynamics for investors to consider.
IHO Group holds 79% of the voting rights in Schaeffler AG and a 46% stake in Continental AG.
IHO Group (investment holding of the Schaeffler family) is the controlling shareholder and currently owns 46% of Continental shares.
As of 2021, the firm was majority owned by Maria-Elizabeth Schaeffler-Thumann and her son Georg F. W. Schaeffler through a series of holding companies. These holding companies, controlled by the Schaeffler family, also own controlling interests in Continental AG and Vitesco Technologies.
This concentrated ownership structure—replicated in Aumovio through the spin-off mechanism—creates both opportunities and challenges.
Advantages of anchor shareholder: - Long-term strategic perspective typical of family-controlled industrial companies - Protection against short-term activist pressure - Stable institutional backing providing confidence to management - Deep industry expertise at the shareholder level
Potential concerns: - Limited market float (approximately 54% free float) - Potential conflicts of interest between controlling and minority shareholders - Related-party transaction complexity given interconnections between Schaeffler, Continental, Vitesco, and now Aumovio
The Schaeffler family's IHO Holding, which owns IHO Verwaltungs GmbH, the holding company with a controlling stake in Schaeffler Group, also has a 46.0 per cent share in Continental. The two firms are respectively the fourth and third largest German automotive suppliers after Bosch and ZF.
The Schaeffler-Vitesco merger (completed in 2024) further complicated this web. In 2023, Schaeffler and Vitesco Technologies Group AG signed a Business Combination Agreement. This means the Schaeffler family now controls significant positions across the entire German Tier 1 supplier landscape—an unusual concentration of industrial power.
For investors, the ownership structure demands careful consideration of minority shareholder protections, related-party transactions, and the implications of family control. The upside is stability and long-term thinking; the risk is potential misalignment of interests.
IX. Playbook: Business & Investing Lessons
The Aumovio story offers several transferable lessons for investors and business strategists.
1. Acquisition Strategy: Building Capability Through M&A
Continental's transformation from tire company to electronics powerhouse demonstrates how acquisitions can accelerate strategic repositioning:
- Temic (2001): Established electronics credibility
- Phoenix AG (2004): Consolidated rubber products leadership
- Motorola automotive (2006): Expanded North American presence and telematics
- Siemens VDO (2007): Transformed scale and competitive position
- Elektrobit (2015): Added critical software capabilities
The pattern: Continental consistently acquired capabilities it couldn't build fast enough organically, accepting integration risk in exchange for strategic acceleration.
2. Surviving Hostile Takeovers
The Schaeffler saga offers lessons in corporate resilience: - Leverage creates vulnerability, but doesn't guarantee failure - Crisis management matters more than crisis avoidance - Long-term value creation can occur under ownership structures that initially appear hostile - Political engagement (Gerhard Schröder's mediation) can shape corporate outcomes
3. Spin-Off Value Creation
Both the Vitesco (2021) and Aumovio (2025) spin-offs followed a similar template: - Clean balance sheet for the separated entity - Clear strategic mandate distinct from parent - Management team with operational authority - Capital structure supporting growth investment
The Aumovio separation specifically addresses the "conglomerate discount" problem: investors couldn't properly value Continental's diverse businesses when combined, but can now allocate capital to tires, industrial rubber, or automotive electronics independently.
4. German Industrial Culture
Aumovio exemplifies several characteristics of German industrial capitalism: - Long-term orientation: Family ownership spanning generations - Engineering excellence: R&D investment even during financial stress - Stakeholder capitalism: Worker representation on supervisory boards - Patient capital: Willingness to accept lower short-term returns for long-term positioning
5. Technology Transitions
The company's journey from rubber to electronics illustrates how industrial companies can navigate generational technological shifts: - Recognize the transition early (Continental's 1990s automotive electronics pivot) - Build or buy required capabilities - Accept that some legacy businesses may need separation (Vitesco, now Aumovio) - Maintain R&D intensity through cycles
X. Porter's 5 Forces & Hamilton's 7 Powers Analysis
Porter's Five Forces Analysis for Aumovio
| Force | Assessment | Key Dynamics |
|---|---|---|
| Threat of New Entrants | LOW-MEDIUM | The competitive landscape of the automotive components manufacturing industry is marked by innovation, consolidation, and global expansion. The surge in electric vehicle (EV) adoption is placing significant demand on component suppliers, particularly in areas such as lightweight materials, battery systems, and electronic modules. Additionally, the increasing integration of advanced driver assistance systems (ADAS), infotainment platforms, and connected technologies is redefining the scope of auto parts manufacturing. High capital requirements and need for OEM relationships create barriers, but tech giants (Apple, Google, Nvidia) are entering the autonomous/SDV space. |
| Bargaining Power of Suppliers | MEDIUM | Semiconductor shortages demonstrated supply chain vulnerabilities. Key components like advanced chips have limited suppliers. |
| Bargaining Power of Buyers | HIGH | OEMs like VW, BMW, Toyota are massive, sophisticated buyers. Pricing pressure is constant. Long development cycles create switching costs but also lock-in. |
| Threat of Substitutes | MEDIUM-HIGH | OEMs increasingly developing in-house capabilities; Chinese suppliers emerging; potential for vertical integration by tech companies |
| Competitive Rivalry | HIGH | Bosch's main competitors in the automotive supply market include Germany-based Continental and ZF Friedrichshafen, as well as Japanese Denso Corporation and Canadian Magna International. Intense competition, consolidation ongoing, price competition in mature segments. |
Hamilton's 7 Powers Analysis
| Power | Assessment | Evidence |
|---|---|---|
| Scale Economies | STRONG | Over 86,000 employees across more than 100 locations worldwide enable massive R&D amortization across global volume. Today, products with a global top-3 market position already account for more than 80 percent of our global sales. |
| Network Effects | WEAK | Limited network effects in traditional Tier 1 supplier model; some potential in connected car data through platforms like eHorizon. |
| Counter-Positioning | MODERATE | Independent structure allows faster decision-making vs. conglomerate structure; but established players can adapt. |
| Switching Costs | STRONG | Deep integration with OEM development cycles over decades. Validation and certification processes create significant switching costs. Multi-year development programs create lock-in. |
| Branding | MODERATE | Strong Continental heritage; new Aumovio brand needs to establish independent identity. B2B focus limits consumer brand value, though VDO brand retains fleet management recognition. |
| Cornered Resource | MODERATE | Engineering talent pool in Germany; established OEM relationships globally. |
| Process Power | STRONG | AUMOVIO offers a comprehensive portfolio with cutting-edge electronics solutions and innovative technologies for software-defined and autonomous vehicles. Complementing our strong market position with innovative sensor solutions and displays as well as technologically leading brake and comfort systems, the company has extensive expertise in software, architecture platforms, and assistance systems. Decades of automotive systems integration experience create tacit knowledge advantages. |
Key Strategic Takeaways
Aumovio's strongest powers are Scale Economies, Switching Costs, and Process Power. The company benefits from: - Massive R&D investment spread across global production volumes - Deep OEM relationships with multi-year development cycles - Accumulated expertise in safety-critical systems integration
Main vulnerabilities include: - OEM in-sourcing trends (especially in software) - Chinese supplier competition on cost - Tech company entry into autonomous driving - Commodity exposure in mature product segments
Competitive Position
The ADAS market is competitive, with five leading players such as Robert Bosch GmbH (Germany), Continental AG (Germany), Denso Corporation (Japan), ZF Friedrichshafen AG (Germany), and Magna International Inc. (Canada) collectively holding 21-31% of the total market share. Bosch focuses on sensor fusion, advanced camera technologies, and integrated electronic systems to enable scalable, high-precision ADAS solutions for assisted and automated driving. ZF leverages its strengths in chassis, steering, and electronic systems to deliver modular, software-defined ADAS platforms that support electrified and autonomous mobility. Continental (Aumovio) drives innovation in ADAS through smart sensor systems, connected vehicle technologies, and software platforms to enhance safety, comfort, and autonomous driving capabilities. Denso develops sensors and ECUs, leveraging dedicated R&D like DNAE to drive camera-based ADAS innovation for safer and autonomous mobility.
Traditional tier-one suppliers like Robert Bosch, Continental, and Denso maintain leadership positions through substantial R&D investments and strategic pivots toward electrification and software capabilities. The industry's transformation toward software-defined vehicles increasingly shapes the competitive dynamics, with suppliers required to develop hardware and software competencies to remain relevant.
XI. Key Performance Indicators for Ongoing Monitoring
For long-term fundamental investors evaluating Aumovio, three KPIs warrant ongoing attention:
1. Adjusted EBIT Margin Progression
Current state: 2.7% (H1 2025), up from 2.5% in 2024 Target: 6.0-8.0% long-term
This is the primary indicator of operational execution. Aumovio's margin expansion story depends on: - Portfolio optimization (exiting low-margin product lines) - R&D efficiency improvement (reducing R&D ratio from 10%+ to sub-9%) - Operational excellence programs - Product mix shift toward higher-value solutions
Why it matters: Tier 1 automotive suppliers face persistent pricing pressure from OEM customers. Margin expansion must come from cost reduction or product innovation premium—Aumovio's strategy attempts both.
2. Content per Vehicle Growth
Current projection: 4-5% annual growth through 2029
This metric captures whether Aumovio is increasing its share of vehicle value—a crucial indicator of competitive positioning. Positive trends suggest: - Technology leadership enabling premium pricing - Successful penetration of growth segments (ADAS, connectivity, displays) - Effective response to software-defined vehicle transition
Why it matters: If content per vehicle grows slower than target, it signals competitive share loss or commoditization of product segments.
3. Order Backlog / Book-to-Bill Ratio
Current state: €19.3 billion order backlog
Order backlog provides forward visibility into revenue trajectory and customer commitment. Changes in backlog: - Measure customer confidence in Aumovio's technology roadmap - Indicate competitive win/loss dynamics - Provide early warning of market share changes
Why it matters: In an industry with multi-year development cycles, order backlog is the leading indicator of future revenue. A declining backlog would signal competitive deterioration well before it appears in financial statements.
XII. Risk Factors and Considerations
Market Risks
Automotive cycle exposure: Aumovio's revenue remains tied to global vehicle production volumes. Economic downturns, OEM production cuts, or inventory corrections directly impact supplier revenues.
Chinese market dynamics: China represents both opportunity (largest automotive market) and risk (domestic supplier competition, potential trade restrictions, technology transfer requirements).
Technology transition risk: The shift to software-defined vehicles could advantage new entrants (tech companies, Chinese suppliers) over traditional Tier 1 suppliers if legacy players cannot adapt software competencies fast enough.
Operational Risks
Customer concentration: Dependence on major OEMs creates revenue concentration risk. Changes in OEM strategy (in-sourcing, supplier consolidation) could impact Aumovio's competitive position.
R&D execution: Meeting margin targets while maintaining technology leadership requires disciplined R&D allocation. Under-investment risks competitive position; over-investment delays profitability targets.
Talent retention: Software engineering talent competition with tech companies creates ongoing human capital challenges.
Financial Risks
Working capital intensity: Tier 1 supplier business model requires significant working capital investment. OEM payment terms and inventory management directly impact free cash flow generation.
Capital allocation trade-offs: Balancing dividend commitments (10-30% payout ratio), R&D investment, and potential M&A creates capital allocation complexity.
Governance Considerations
Concentrated ownership: The 46% IHO Group stake provides stability but creates potential minority shareholder alignment questions. Related-party transactions with Continental, Schaeffler, and Vitesco require ongoing monitoring.
XIII. Conclusion: The Independence Bet
The Aumovio story is, at its heart, a bet on independence.
Continental's management concluded that the automotive electronics business could generate more value as a focused, independent company than as a division within a diversified conglomerate. The thesis rests on several assumptions:
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Market recognition: Investors will value a pure-play automotive technology company differently (presumably better) than a conglomerate encompassing tires, industrial rubber, and automotive electronics.
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Operational focus: Independence enables faster decision-making, clearer strategic priorities, and better alignment between management incentives and business performance.
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Capital allocation: An independent board and management team can allocate capital to the highest-return opportunities without competition from sister divisions.
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Customer relationships: OEMs may prefer suppliers focused exclusively on their needs rather than divisions within broader organizations.
"Today's listing marks the start of a new era in our history. We not only start the initial trading of our shares, but also the launch of Aumovio as a new and independent company. We are committed to playing a key role in shaping the future of mobility as a leader for automotive technology and electronics. In doing so, we are combining our tradition and unique automotive expertise with a clear focus on shaping a promising future," said Philipp von Hirschheydt, CEO of Aumovio SE.
The company enters independence with genuine competitive strengths: century-plus engineering heritage, established OEM relationships, meaningful scale, and a product portfolio positioned at the intersection of automotive technology's most attractive growth vectors.
But challenges abound. Margin expansion from 2.5% to 6-8% is ambitious. Competition from Bosch, Denso, ZF, and emerging Chinese players is intense. The software-defined vehicle transition requires capabilities that traditional suppliers must still prove they can develop. And the automotive industry's cyclicality guarantees volatility.
For sophisticated investors, Aumovio represents an interesting case study in corporate transformation and value creation through strategic separation. The 150-year journey from hoof buffers to autonomous mobility platforms continues—now under a new name, with new capital structure, and a mandate to prove that independence was the right choice.
The road ahead is uncertain. But then again, it always has been for this company that has reinvented itself through two world wars, multiple technological revolutions, a hostile takeover, and countless industry cycles. The bet on independence is simply the latest chapter in a story that began with rubber, horses, and a vision for mobility's future.
| Company Snapshot | |
|---|---|
| Legal Name | Aumovio SE |
| Ticker Symbol | AMV0.DE (Frankfurt Stock Exchange, Prime Standard) |
| ISIN | DE000AUM0V10 |
| Headquarters | Frankfurt am Main, Germany |
| FY2024 Revenue | €19.6 billion |
| Employees | 86,000+ |
| Global Locations | 100+ in 25 countries |
| Market Cap at IPO | €3.5 billion (at €35.00 opening price) |
| Controlling Shareholder | IHO Group (~46%) |
| CEO | Philipp von Hirschheydt |
| CFO | Dr. Jutta A. Dönges (from March 2026) |
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