Conti plans tyre production in China

That Continental wants to manufacture tyres in China, has already been decided. The questions now are “Where” and “How”, so Continental executive committee Hans-Joachim Nikolin told the “Hannoversche Allgemeine Zeitung” (HAZ).

The company has already inspected some 20 tyre plants, one of which will be taken over and modernised in a joint venture. The investment will cost a high two digit million figure for Continental. Conti intends to manufacture annually about ten million passenger car and one million truck tyres, according to the spokesman for the commercial vehicle tyre range in the Continental executive committee. The venture will employ about a thousand people and production is scheduled to start in 2006.

To date Continental has shrunk from the course of dealing in China because the structure and operation of the aftermarket for tyres is much more complex than with the investments of the sections already present in China, Automotive Systems (CAS) and ContiTech, these simply followed their OE customers.

Continental presumes that the Chinese passenger car and truck tyre market will grow until 2008 to 70 million units (plus 50 per cent from 2002), so Nikolin says that Continental does not fear the danger of over-capcity.

Continental follows its direct competitors in the tyre business, who are already active in China (Michelin, Bridgestone or Goodyear), and bases its development on the good OE relationships in Europe (according to Nikolin Conti has an OE share of 30 per cent in Europe): In China Conti can profit from ist strong position in the European OE business, Nikolin told the local newspaper: “I cannot see any reason why these customers in China should throw us a googlie?