Conti’s Discusses Building New Factory

Continental is currently considering plans to build a new tyre factory in Europe, according to Dr Alan Hippe, chief financial officer. If demands continue to be as strong as they are today, it would be the next logical step, said Dr Hippe speaking at the Geneva Motor Show. Such a new facility would have to be built in Eastern Europe, possibly in Lithuania, writes the Berliner Morgenpost. Recently Continental invested a considerable amount of money in Eastern Europe in order to cut production costs.

Deutsche Bank analysts reported that Continental’s presentation was both “bullish“ and “striking.” In his presentation, Dr Hippe explained that Continental had revised its ESP penetration expectations for the US market to about 18 per cent in 2006, lifting the volume target to 1 million units. The CFO also suggested that the German manufacturer could be in a net cash position as early as the end of 2005. According to the analysts, “the bottom line is the growth and free cash story continues (at least 600-700 million euros per year).”