Conti reports global growth in winter, OEM sectors

On March 3 Continental AG will hold its annual press conference, at which it will provide detailed information on its performance in 2010, a year in which the automotive supplier says it emerged from the crisis “in impressively good shape.” The company has already reported an increase in annual sales from 20 billion euros in 2009 to “at least” 25.5 billion euros last year, a figure helped by the “positive performance” of the company’s car tyre division.

Summarising last year’s results, Nikolai Setzer, head of Continental’s Passenger and Light Truck Tires division, said that global demand for winter tyres had been “extremely strong”. During the year winter tyre sales exceeded 20 million units for the first time, and Conti anticipates two further sources of market potential – the first being increasing safety awareness among motorists and the second the fact that more countries are expected to introduce legislation on mandatory winter tyre use. Global tyre sales to OEM customers also “substantially” increased compared with 2009 and the number of OEM orders places rose above the company’s 30 per cent market share. These two positive trends were however counterbalanced by what Continental calls an “explosion” in raw material prices; costs related to raw materials created an additional cost of 480 million euros in 2010 and price increases have been implemented in response to this. On January 1 the price of Conti’s summer tyres went up by an average of five per cent and the manufacturer says further price increases “will have to follow to offset at least some of the sharp rises in costs.”

“The successes enjoyed last year prove that we have emerged from the crisis,” Setzer commented. “We will continue to focus on opening up market potential through the use of top-class technologies and products, and we will aim to steadily expand our market position.” Continental says it will “systematically” pursue its multi-brand strategy, with both new products and new factories contributing to growth. Existing capacities will also be increased, the manufacturer adds.

Regarding global expansion plans, Setzer sees great potential for above-average growth in Brazil, Russia and China. The recently-opened tyre plant in Hefei, China, which has now commenced production, will help reduce dependence on imports in the long term and provide tyres for the fast-growing Chinese market; Continental reports sales there have already exceeded a million units. The company’s Camaçari site in Brazil is also to be further expanded to cope with the pronounced increase in demand – in 2010 around 4.7 million car tyres were produced at this location. Continental is planning to set up a new production site in Russia; the amount to be invested and the exact location of the site are to be decided this year.