Conti’s European Tyre Price Increase

Continental increased its European tyre prices by three per cent in August, completing its round of 10 per cent price increases in the European replacement tyre markets within that month.

Morgan Stanley views this as “a sign of confidence in the outlook for the European part of Continental’s tyre business.” Based on its current 2005 European tyre revenue forecast, it estimates that a three per cent increase (assuming no giveback to consumers), would equate to €80-85 million additional profits.

More importantly the company also anticipates that this will allow Conti to “stay ahead of increased raw material costs” which it expects to register a global increase in the tyre division of the same magnitude