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2 March 2007 By John Foley Follow @johnsfoley

After all, making electronics for cars isn’t a core business. And boss Klaus Kleinfeld is meant to be restructuring the German conglomerate. So why doesn’t he just get on and have an auction? Corporate politics seem to be getting in the way worse luck.

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Continental, the German tyre and carparts manufacturer, has said it would be interested in buying Siemens' VDO unit. Last month the German conglomerate said it intends to float a minority stake of VDO, which makes electronics for the automotive industry.

VDO has annual sales of around E10bn, equivalent to roughly 12% of the group total. Five automotive clients – DaimlerChrysler, BMW, Ford, Volkswagen and General Motors – account for around a third of its revenues.

The unit was acquired as part of Siemens' E9.5bn purchase of Atecs in 2001, a deal undertaken while the current chairman, Heinrich von Pierer, was chief executive. His successor, Klaus Kleinfeld, took over in January 2005.

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