Download ContiTireNews (PDF) - Continental Tyre Group AG

ContiTireNews
Editor responsible under press law:
Continental Corporation
Alexander Bahlmann
Head of Media & Public Relations PLT
Tires Divison
Buettnerstraße 25 | 30165 Hannover
Phone: +49 511 938-2615
E-Mail: alexander.bahlmann@conti.de
Authors: Klaus Engelhart, Ildiko Kovacs, Dr. Christiane Pfeiffer, Anna Stuhlmeier, Ute Weiss
Media database under: www.mediacenter.continental-corporation.com
Online version under: https://c-inside.conti.de/ > Reifen
Continental Corporation
Dr. Christiane Pfeiffer
Head of Communications CVT
Tires Division
Buettnerstraße 25 | 30165 Hannover
Phone: +49 511 938-2683
E-Mail: christiane.pfeiffer@conti.de
Issue 08/12 | September 2012
Tires for Passenger Cars
Tires for Motorbikes
Tires for Bikes
Tires for Trucks and Buses
Tires for Industry
Demand is rising on an international level – Tire division with
ambitious growth targets
Expanding capacity on three continents
Investments totaling around €1 billion
Improved availability makes itself felt right through to the German tire business
Producing quantities to match demand, making use of
market opportunities and achieving sustainable growth
- these are the goals of the unprecedented expansion
of production capacities in the Tire division at Continental
AG. In the second half of last year, the largest
investment program in the history of the company was
launched with a volume totaling around €1 billion.
During the course of the program, the potential production
quantities will increase by over 20 million tires
worldwide. The Brazilian plant in Camacari, for example,
is being expanded to such an extent that the output
can be increased to more than eight million tires. The
new plant in China (Hefei) has only just opened and
plans are already in place to double production quantities
with further investments of an additional €134 million.
The current capacity in Hefei is four million tires.
The new plant in Russia will produce the same quantity.
Just like in China, the sites purchased by Continental have
the potential to be expanded to an annual capacity of up to
16 million.
Another four-million plant is also being built in the USA.
Building work began at the end of 2011 and the first tires
will be produced from 2014. Progress is quicker in the existing
US plant in Mount Vernon in the state of Illinois, where
the capacities are currently being expanded at top speed
from nine to 13 million.
The focus is still on the production sites in India, where expansions
are also planned and will mainly benefit the bus
and truck tire business.

ContiTireNews
Increased presence in India
Modi Tyres Company Limited (MTCL) is the name of the company
that Continental took over as a 100% subsidiary in the
second half of 2011. The purchase price of the subsidiary
of Modi Rubber Ltd. came to €18.5 million. Under the name
Continental Tyres India, the new company will be focusing on
the production and sale of cross-ply and radial-ply tires for
trucks and busses, as well as radial tires for passenger vehicles.
Because the truck tire market in India is of major importance
all over the world, the transaction strengthens the
commercial vehicles business first and foremost. The market
volume already lies significantly over the total market volume in
Western and Central Europe combined, with around 18 million
tires per year. Added to this is the rapidly increasing demand
for vehicles with high-quality car tires and premium technology.
Continental Tyres India Ltd. has a registered headquarters
in Delhi and has production sites in Modipuram and Partapur.
Starting from 500,000 cross-ply tires for trucks and busses
in 2011, the plan is to increase the number continuously to
reach one million tires a year in two years. In the conviction
that radial tires will soon become a key driving force in the Indian
tire market, Continental is investing over 50 million euros
in the manufacture of radial tires for commercial vehicles and
passenger vehicles. Production is planned to start from 2013.
Between 600 and 800 additional jobs will increase the number
of employees in India from 1,600 to 2,400.
Continental is also continuing its investments in Malaysia.
Continental has purchased the remaining 30% of shares in
Continental Sime Tyre Sdn. Bhd. from joint-venture partner
Sime Darby. This makes Continental Sime Tyre Sdn. Bhd. a
100% subsidiary of Continental and it now goes by the new
name of Continental Tyre Malaysia Sdn. Bhd. The purchase
underlines Continental‘s long-term interest and commitment
in the ASEAN area and the Pacific Asia region.
Production in Russia due to start in 2013
Issue 08/12 | September 2012
Page 2
While Continental is initially focusing mainly on the replacement business in India, in line with existing structures,
the company is directing its expansion activity in the Russian market at the original equipment requirements of
leading vehicle manufacturers. In Kaluga, home to Europe‘s market leader Volkswagen as well as other international
vehicle manufacturers, capacities will be created for four million passenger and light truck tires of the brands
Continental, Gislaved, Barum and Matador from 2013. Continental is investing around €240 million in the 400 new
jobs at the site located 170 kilometers south west of Moscow. There are plans to double these numbers in the near
future.
As the local production means that no import duty is paid and the transport costs are significantly reduced, the
competitive edge of the company is increased in one of the most important individual markets of the future, with
vehicle registrations rising well within the double-digit figures. By basing tire production at this site, Continental is
adding to the existing production sites in Kaluga for engine controls and additional electronic components.

ContiTireNews
1,700 new jobs
in South Carolina, USA
In contrast to India and Russia, where the investments
in new production sites were intended mainly to open up
new strategic markets, the expansion in the USA is in
response to the major increase in demand for passenger
and light truck tires in both the replacement business
and the original equipment business. In 2010 and 2011,
the turnover in these fields increased by 20%. The new
tire plant is being built in Sumter, South Carolina, where
Continental will invest over $500 million in total. Annual
production at the site will be increased continuously to
almost five million tires by 2017. From 2021, the figures
should even reach eight million. Over 1,600 new jobs will
be created in production by this time.
Easing the tension in the
German-speaking replacement market
These rapid expansions in capacity around the world will
also have a positive impact on the German-speaking replacement
markets, where the supply situation has been
stretched to its limits recently. Once the expansions take
effect, the transfers from the European plants to overseas
markets can be continuously reduced. This will give
Continental more room to react flexibly to fluctuations in
demand and ensure that the company can once again
fulfill its commitment to maintaining its ability to supply.
This will also mean that the company is well equipped to
meet additional demand which could arise, for example
due to an increase in the minimum legal tread depth on
winter tires in the passenger vehicle segment.
Issue 08/12 | September 2012
Page 3
Truck tire hot retreading
production in Western Europe
In light of the expansions, Continental is also planning to
increase its activities in truck tire retreading. By starting
its own production for truck tire hot retreading in Western
Europe, Continental will spread the new ContiLifeCycle
concept introduced in 2010 over a broader base. �