Continental AG cut its sales outlook for the year on weakening markets for tires in Europe and North America.

The company said it expects consolidated sales of as much as €44.5 billion ($48.8 billion), down from an earlier forecast of €45 billion, but left its other sales and margin predictions unchanged.

The German supplier, which sells tires, automotive components and industrial materials, fell short of analysts’ expectations last month when it pre-released second quarter results after freight costs and currency effects weighed on margins at its car-parts unit.

The company recorded order intake of roughly €8.6 billion for its automotive division in the second quarter but is still negotiating price agreements with customers to cope with inflation.

Continental’s core braking, sensor and chassis components are losing some ground as the industry shifts to new systems for electric vehicles. The company is exiting one of its German car part plants due to declining demand from automotive clients and the site’s excessive costs.

Continental plans to share an update on mid-term strategy at an investor event later this year or early next.