By Mauro Orru

German tire maker Continental said lower U.S. tariffs would cut costs in the second half, days after Washington said it would reduce levies on cars imported from the European Union.

The company said last week's announcement from the U.S. to lower European car tariffs to 15% was supportive and could reduce costs in its tire business by a mid-double-digit million-euro amount in the second half.

U.S. officials recently told the EU that they would reduce auto tariffs from a level of 27.5% once the bloc introduced legislation to cut levies on a range of American products. The European Commission, the EU's executive arm, introduced its legislation in August and had been waiting for the U.S. to follow through.

While Continental welcomed the announcement, the company said the third quarter would only benefit slightly from lower tariffs. It estimates a hit in the high double-digit million-euro range for its tire business in the second half.

The group said revenue from that business in the third quarter should be roughly flat on year as demand remained subdued across all regions.

Meanwhile, the company said ContiTech, a unit that manufactures products such as hoses and conveyer belts as well as materials for vehicle interiors, performed worse than expected. Continental expects a recovery in that segment in the fourth quarter.

Continental said free cash flow for the whole group should be slightly positive in the third quarter. However, it warned of a mid-triple-digit million-euro amount hit due to the deconsolidation of Aumovio, which started trading last month on the Frankfurt stock exchange following its spinoff from Continental.

Write to Mauro Orru at mauro.orru@wsj.com

(END) Dow Jones Newswires

October 01, 2025 12:02 ET (16:02 GMT)

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