Conti seeking a global top spot
Continental’s tyre business – the German automotive supplier’s most important division – aims to intensify its competition with the top three global players over the coming decade or so. According to an article published yesterday by German financial daily Handelsblatt, growth in international markets as part of its ‘expansion strategy 2025’ will fortify the European market leader’s position in other regions.
“We must state clearly that we currently lie a fair way behind the three largest global manufacturers, Bridgestone, Michelin and Goodyear,” commented Nikolai Setzer, head of Continental’s Tyres Division. “But if we can gain market share, then we’ll draw nearer to the top three.” While the Handelsblatt shares that Setzer doesn’t view “being the best on all fronts” as necessary, it notes that the world’s fourth largest tyre maker is striving to gain a top technological position in core segments such as passenger car tyres. Profitable growth is a priority, Setzer added.
In the first nine months of 2012 the German company increased its tyre business turnover by almost 14 per cent to 7.2 billion euros – 30 per cent of the firm’s 24.6 billion euro turnover. Despite the slump in Europe’s automotive segment, Continental anticipates its turnover within our region will increase more than seven per cent to over 32.5 billion euros. The tyre business is the main driver behind this.
Long timeframes are the rule within the tyre business, observes the Handelsblatt. Five years can pass from initial planning to when a new factory enters service and can supply OEM customers. “Therefore no flights of fancy lurk behind strategy 2025,” Setzer stated. “It involves concrete plans.”
The first phase of the three-stage plan covered the years 2001 to 2010; during this time Continental geared the tyre business towards profitability, a move that involved decreasing capacity in the loss-making US business and in the commercial vehicle segment. “Now we are in the middle of the second phase, to 2015, and we want to grow globally, particularly in emerging countries,” continued Setzer.
The Handelsblatt writes that Continental is expanding production in China to eight million tyres per annum, in India it is introducing radial patterns, the tyre maker plans to begin its own production in Russia next year and in Brazil it will double capacity to nine million units. In the plan’s third phase, to 2025, further increasing added value will play a central role.
One particular aim is to bring a greater global balance to production. “Continental has previously been to too great an extent at the mercy of fluctuations in Europe,” Nikolai Setzer stated. “Therefore we are positioning the tyre division more consistently so it can profit from the dynamics of other global regions.” To this point, the Handelsblatt notes that Continental is currently under-represented in the American continent; this may well change through its sponsorship of the 2014 football World Cup in Brazil.