Continental signs Modi Tyre purchase agreement
Continental AG has taken a step towards the Indian market after the tyre manufacturer and automotive supplier signed an agreement with Modi Rubber Ltd to acquire a 100 per cent shareholding of its Modi Tyres Company Limited subsidiary. According to both companies, the completion of the transaction still depends on the fulfilment of certain conditions including regulatory requirements. At the completion of the transaction, Modi Tyres Company Limited will become a wholly owned subsidiary of the Continental Group.
No further details of the price tag, strategy or method of investment behind the proposed deal. However, in answer to Tyres & Accessories’ questions, a Continental spokesperson said the company will “focus on local production and distribution of bias and radial truck/bus tyres as well as radial passenger car tyres for the Indian market.” While the specifics of the deal remain to be seen, the inclusion of radial production in the company’s statement could be seen as a hint that the firm has plans to upgrade machinery or increase radial output at Modi.
According to the company, this latest development underlines Continental’s commitment to the Indian market and is part of the company’s strategy to invest in growing markets in Asia for its core businesses: “India is a growing market and we see huge potential here. With further economic development and global exposure, this will continue to develop, and there will be a demand for vehicles with high quality tyres. Technologically too, there is development at a fast pace. We are confident that this market will be keen to leverage our international experience, technical expertise and now our local presence.”