HEFEI, China (May 18, 2011) — Continental A.G. has commissioned production at its $260 million Hefei car tire plant and disclosed plans to quadruple the size of the factory over time to 16 million units annually.
Conti held a ceremony this week to mark the start of production, two and half years after breaking ground on the project in Anhui Province. The commencement of production is about a year later than originally planned, owing to Conti's decision during the most recent global economic recession to slow the pace of construction.
The plant is designed with an annual capacity of 4 million tires in its first phase, Conti said, destined for both domestic sales and export to other Asian markets. The 753,000-sq.-ft. plant employs 400 at startup, but Conti said it expects to add 200 more jobs throughout 2011.
“Asia is one of our key growth markets,” said Conti CEO Elmar Degenhart. “This investment is another major step into this direction, with which we are significantly enhancing our position in the automotive industry in China and in the Asia Pacific region.”
Production at first will focus on the ContiPremiumContact 2 and ContiComfortContact 5, both of which are tailored for the Chinese market.
Conti said the factory's targeted annual production volume is 16 million tires, or 60 percent more than officials have stated in the past. The company said “further investments for the expansion of the existing production capacity are planned in the near future” but released no figures. The additional investments will create more jobs as production grow, Conti said.
Regarding the plant's importance, Conti noted that starting in 2012 nearly every second car produced worldwide will be made in Asia, with China being the growth leader. Continental as a corporation has 18 production locations and 15 sales offices in China, representing a workforce of about 14,000.
“The opening of our manufacturing plant in Hefei is a key milestone on our journey to enhancing strategic growth and further increasing our presence in China and overall in Asia,” said Nikolai Setzer, executive board member responsible for Conti's passenger car/light truck tires division, at the plant's opening.