Conti’s Losses Continue in North America
Deutsche Bank analysts are convinced that Continental’s US passenger car division has made losses of up to 200 million euros last year. The closure of Conti’s Mayfield facility was expected to have cost up to 120 million euros alone. Financial experts have abandoned hope for a noticeable and continuous growth. During 2005 the tyre manufacturer is expected to come up with an annual loss of about 100 million euros, says Deutsche Bank, meaning that the shutdown of the Mayfield factory didn’t have its expected positive affect.
According to the analysts there is no reason to expect a quick improvement in the profitability of Continental’s North American tyre business unit. Significant improvement in the business unit is not expected before 2007 when the German manufacturer will begin selling the first tyres produced in its Brazilian facility.
At the same time Continental has announced a third set of truck tyre price increases in North America. Prices are set to rise by up to 7 per cent, according to analysts who say that raw material prices increases of close to 15 per cent in the second half of 2005 mean the industry needs to increase selling prices by around 5 per cent.