BERLIN (Reuters) -Continental said on Friday it plans to phase out business activities at its Gifhorn plant by the end of 2027, with 450 out of 900 jobs at the site initially affected.

The decision was taken "against the backdrop of the sharp increase in cost pressure in the automotive industry, the declining automotive markets, and the high and by international standards uncompetitive cost structure at the site", the company said in a statement.

The measures will include relocation of the assembly of latest-generation air supply systems in 2024, relocation of the spare parts business from 2024, and outsourcing of valve block and piston head production to suppliers by the end of 2027.

The supervisory board supports the initial measures but will decide on the phase-out at its December meeting, the company said.

HR head Ariane Reinhart said Continental would either move affected workers to other parts of the company or assist them in finding work on the external labour market.

(Reporting by Friederike Heine, Editing by Rachel More and Miranda Murray)