HANOVER, Germany-Despite spiraling raw materials costs, Continental A.G. reported higher pre-tax consolidated earnings for the first nine months of 1994. Management expects a ``slightly increased'' profit for the full year, compared with 1993, thanks in part to a healthy winter tire business in Europe.
Continental expects its General Tire subsidiary to post a ``slight'' year-end loss, attributable primarily to costs associated with ``necessary restructuring measures.'' On an operating basis, General is at break-even through the three quarters, while increasing sales 0.9 percent to $1.06 billion, Conti said.
General reduced its losses in the passenger car tire sector and improved earnings in the commercial vehicle sector, Conti said. Deliveries of original equipment tires increased, and General secured original equipment contracts with the new U.S. assembly plants of BMW A.G. and Mercedes-Benz A.G.
Conti did not divulge its nine-month earnings or the size of the increase. First-half earnings were up 20.8 percent to $23.7 million.
``The extreme price pressure in all markets, movements in exchange rates and...soaring raw material prices limit the improvement we have accomplished in our result by means of extensive measures, restructuring and a perceptible increase in efficiency,'' the company said in a letter to shareholders.
Sales for the nine months were up 7.1 percent to $4.66 billion, although the bulk of the growth was due to newly consolidated companies. On a direct comparison, sales rose 2.6 percent, the firm said. Sales growth for the third quarter was 8.7 percent.
Conti's Automotive Systems Group, created at the beginning of 1994 to coordinate systems assembly and supply projects, has secured two more contracts and announced plans to concentrate development activities at the firm's Hanover/Stocken facility.
In Hanover, Conti will take over tire/wheel assembly for Volkswagen A.G.'s transporter van assembly plant early next year in a joint venture arrangement with Mannesmann-Kronprinz A.G. The contract calls for the venture to supply up to 900,000 mounted tires to Volkswagen annually; the move will allow VW to move 25 employees to other assignments.
This is Conti's fourth tire-wheel assembly site, and other projects based outside of Germany are ``on the drawing board,'' the firm said.
The existing units are near Zwickau, Germany, for VW's Mosel factory, near Ludwigsfelde, Germany, for a Mercedes-Benz truck plant near Berlin, and in Palmela, Portugal, for the VW-Ford Motor passenger van assembly plant.