Continental Eyes India and Russia
A report on the Bloomberg Business Week website suggests that Continental AG will decide this year on building car-tyre plants in India and Russia to tap those countries' growth while avoiding import restrictions. In an interview, Nikolai Setzer, head of Continental's car-tyre unit, said: "It's obvious that we need to have local production in India and Russia if we want to be a strong player there. We are still evaluating different concepts and ideas, but we do want to have a decision this year."
Russia has 20 per cent import tariffs on tyre imports and India, much like China, is trying to protect local manufacturers by requiring foreign companies to certify their products through complex procedures, Setzer said. Continental considers Asia and Russia key markets for growth as it tries to generate cash and pay off 8.2 billion euros ($10.4 billion) in debt.
The company sees large growth potential for the Russian and Indian tyre markets and wants to avoid the cost of shipping from its plants in Europe and Malaysia, Setzer said. He declined to comment on investment or production targets.
Continental currently runs a truck tyre production partnership with Modi Tyres in India, but financial analysts have previously suggested that the company cannot afford a larger scale cooperation in India, Russia or another emerging market. If something has changed, it would be interesting to learn what exactly.