Even though Ulrich Wellen has been president and CEO of Continental Tire North America (CTNA) Inc. for only a few weeks, he is determined to return the company to profitability this year. He expects a ``trilogy'' of new ultra-high-performance tires to help lead the way.
Two of those three tires were introduced to North American markets during a three-day media, dealer and sales event at the company's Uvalde, Texas, proving grounds. It was there that Mr. Wellen told Tire Business about his ``self-imposed time frame'' to achieve profitability by the end of 2002.
``The recovery actually began in the last half of 2001,'' Mr. Wellen said. ``Truck tires have been profitable and the ContiExtremeContact will help, with 100,000 units planned for production this year.''
The ContiExtremeContact is one of the two tires introduced at Uvalde that will be available to North American consumers on April 1. The other is the ContiSportContact 2. The third tire in the trilogy, the ContiWinterContact TS790, is currently available in limited numbers, with increased production planned for next winter. Both newly introduced tires are aimed at the ultra-high performance sport and luxury car markets, according to Jim Mayfield, marketing director for CTNA.
At the Feb. 26 media briefing, Mr. Mayfield said all-season designs account for 61 percent of the U.S. ultra-high performance market, and claimed that the ContiExtremeContact is the first such tire designed specifically for North American consumers.
``It is the ultimate all-season tire,'' said Gary Zolton, director of product development for CTNA replacement tires. ``It has excellent wet grip and resistance to hydroplaning, ultra-high performance in dry conditions and maximum grip in snow.''
Company tests show that the tire provides wet and dry handling comparable with competing tires, and snow traction ranging from 6 percent to 44 percent better than competing tires. Mr. Zolton attributed the tire's performance to several factors, including:
* A silica-based high grip tread compound that remains rigid in dry conditions, but that can also flex in wet or cold conditions;
* The tire's Shark Fin Bio-Mechanic directional tread design that finds the ``optimum angle of attack'' to provide agility, stability, speed and performance, as well as a quite ride; and
* Directional siping and advanced groove technology to evacuate water efficiently.
The ContiExtremeContact is being introduced as a replacement tire in 29 sizes, covering 75 percent of the ultra-high performance market, Mr. Mayfield said. The tire may also be offered later as an original equipment tire, he added.
The majority of the tires will be built in the U.S. at plants in Charlotte, N.C., and Mt. Vernon, Ill. Mr. Mayfield said that launch volumes in the warehouse on April 1 will be adequate to supply initial demand, and that forecasts and dealer feedback will be used to ensure that supplies are maintained at appropriate levels.
While new to North America, the ContiSportContact 2 was launched in Europe last year as a replacement tire for luxury and sports cars with ultra-high performance engines and sophisticated suspension systems.
It also is an approved OE tire for the Porsche 911 and Boxter; the BMW 3-, 5- and 7-series; the Mercedes C-, E- and S-Class models; the Jaguar XJ8 and XJ/XJS; and the Alfa Romeo 155 and 156. According to a company news release, the ContiSportContact 2 will be made available in 38 sizes in North America and will replace the ContiSportContact over time.
Mr. Mayfield said the tire is designed for ultra-high performance and pleasure driving. Characteristics of the tire are said to be optimum braking and handling performance, as well as resistance to hydroplaning.
Jurgen Sommer, manager, product development-original equipment, explained that the tire's performance characteristics come from being able to control forces in the ``contact patch'' area of the tire.
``For handling, you need a rigid tread structure; for braking a flexible structure to grip the road,'' he explained. ``The ContiSportContact 2 provides low stiffness when braking and high stiffness when driving because the tread contains two compounds to handle both conditions.'' He added that the asymmetrical, directional continuous-ribbed tread pattern contains no blocks that can deform and adversely affect handling.
CTNA product literature maintains that the tread design shortens ABS braking distances, provides high-speed driving stability and steering precision and protection from hydroplaning. In addition, the company says that the tire's ``Bionic Contour'' mold concept provides greater safety when cornering and braking because it allows the ground contact patch to widen.
Performance analyses conducted by CTNA show that the ContiSportContact 2 outperforms both the ContiSportContact and five competing brand tires under various dry and wet conditions.
The media event at Uvalde was far more than a presentation and literature handout. All media representatives had the opportunity to drive a variety of ultra-high performance cars through a pylon course on the proving ground's 800-foot square wet skid pad. They were encouraged to push the vehicles and the new tires to their limits to get a feel for their capabilities. The drivers also tested the tires on wet and dry tracks and on a special rail-guided braking test area.
Other profitability initiatives
The introduction of these two ultra-high performance tires is not the only initiative that CTNA is pursuing. For example, three new General-brand tires also will be introduced over the next several months, Mr. Mayfield said.
To address the concern that the Continental brand is not well established in many parts of the U. S., he said the company will substantially increase its advertising.
``Continental is a high-tech, engineering-focused company,'' Mr. Mayfield said. ``Our heritage is `Built for the Autobahn.' In Europe, we have a reputation for excellence, but we are not well-known in the U.S.''
Plans are to increase ad budgets by $5 million each year over the next five years, he said. The company will use regional television, billboards in seven major markets and print ads in enthusiast magazines. A series of brand awareness ads already has appeared in USA Today, and some TV ads have aired.
Conti officials said they are also paying special attention to dealers. Earlier this year at the company's annual dealer meeting, Mr. Wellen pledged to resolve problems with low fill rates by ensuring better forecasting and adequate production capacity. In addition, the company is supporting its dealers with enhanced point-of-sale displays and support.
Conti also is working to better leverage its technologies into complete systems. During the Feb. 26 event, Mr. Mayfield told Tire Business that the new Ford Expedition will represent the first application of the company's fully integrated platform, including brakes, chassis systems and tires.
``It is part of our corporate strategy to position Continental as an integrated supplier-not just a supplier of components,'' he said.