New tyre plant: Conti talking incentives with Thailand

Continental’s interest in setting up a tyre factory in Thailand has been the subject of rumour for years, and once again the topic is on the table. Bangkok-based newspaper The Nation shares that Sirivan Koo-Amphorn, general manager of Continental Tyres Thailand, is meeting with government representatives this week to discuss incentives and other support that may persuade Continental to select Thailand ahead of rivals such as China. A decision on the location of Continental’s new factory is expected to be taken by the end of this year.

A factory in Thailand would supply export markets, relieving the pressure on fully-utilised plants in Malaysia, China and India, and it would also satisfy local demand. While sales of Continental tyres in Thailand have increased fourfold since 2012, they are still far below targets set late last decade. In 2009, Benoit Henry, who at the time was vice-president of marketing for Continental’s Asia-Pacific region, stated that “within the next two, three years we hope to have captured five per cent of Thailand’s tyre market, and within five years we will be among the top five brands here.” Continental has yet to hit the five per cent target – current market share in Thailand said to be below three per cent. Nevertheless, The Nation reports that Continental would aim to “double its market share from an original target” if and when it begins producing tyres in Thailand. Continental currently services the Thai market with tyres imported from Malaysia.

Sales in Thailand are expected to rise even without the benefit of local production. The Bangkok Post quotes Ms Sirivan as stating that Continental “expects sales to increase 20 per cent this year from the nearly 1 billion baht (€21.6 million) posted last year.” This growth, adds The Nation, will be aided by an expansion of Continental’s dealership network; the company intends to expand its dealer network by 30 per cent from its current network of nearly 300 over the next 12 months. The tyre maker will also extend the product portfolio it offers in Thailand to include light commercial vehicle and van tyres.