Skip to main content
EVENT TRACKER
Keep track of rescheduled, canceled industry events with our COVID-affected event tracker - Powered by Snap Finance
Close
Sister Publication Links
  • Rubber & Plastics News
  • European Rubber Journal
tb-logo
Subscribe
  • Login
  • Register
  • Subscribe
  • News
    • OPINION
    • CORONAVIRUS
    • AUTO INDUSTRY
    • BUSINESS/FINANCIAL
    • COMMERCIAL TIRE
    • FACTORY FIXES
    • GOVERNMENT & LAW
    • INTERNATIONAL
    • MOTOR SPORTS
    • NEW PRODUCTS
    • RETAIL TIRES
    • SERVICE ZONE
    • SEMA/AAPEX
    • SMALL BUSINESS
    • TIRE MAKERS
    • SPONSORED CONTENT
    • New round of Paycheck Protection Program funding opens
      Vaccine may usher sense of normalcy
      Cover-up: More retailers requiring face masks to curb COVID
      USW alleges COVID-19 violations at Kumho plant
    • GM banking on 'BrightDrop' EV to build commercial van business
      Stengel promoted to president of NAPA parent Genuine Parts Co.
      Former auto exec Tyrone Jordan joins Cooper board of directors
      Bridgestone crafts virtual city to showcase sustainable-mobility initiatives
    • New round of Paycheck Protection Program funding opens
      H&H broadens precure OTR business with Continuum mold acquisition
      Apollo to raise prices of Vredestein brand, effective March 1
      Taiwan tire makers propose settlement of import duties case
    • GM banking on 'BrightDrop' EV to build commercial van business
      Gary Price to head Love's Truck Care operations
      TA opens 6th Oregon location, bringing 50 jobs to area
      Love's opens Speedco shops in Ariz., Calif., Ga.
    • New round of Paycheck Protection Program funding opens
      Taiwan tire makers propose settlement of import duties case
      Wireless auto data debate continues
      World rubber demand in 2021 to recover to 2019 levels — IRSG
    • General Tire Canada renews sponsorship deal with Raceline Network
      GRI expanding ag tire capacity at 3-year-old Sri Lanka plant
      Point S Canada adds 61 stores to network in 2020
      New round of Paycheck Protection Program funding opens
    • General Tire Canada renews sponsorship deal with Raceline Network
      Indy Autonomous Challenge: High-speed, head-to-head, no drivers
      TGI secures Cosmo-brand naming rights at Fla. race track
      Firestone Grand Prix of St. Petersburg postponed until April
    • Kumho launches commercial LT, performance tire lines
      The new One: Nokian unveils all-season passenger tire
      Ford, Hyundai earn 2021 top North American vehicle honors
      BKT expanding its ATV/UTV lineup with Sierra Max Pro radials
    • WTC hosting webinar Jan. 20 on load-capacity standards
      Bauer Built completes expansion at Neb. facility
      Point S Canada adds 61 stores to network in 2020
      J.D. Power survey: Quick greeting key to customer satisfaction
    • Shocks/struts maker KYB unveils video training series
      Bauer Built completes expansion at Neb. facility
      Marinucci: Basic steps to email efficiency
      Point S Canada adds 61 stores to network in 2020
    • WTC hosting webinar Jan. 20 on load-capacity standards
      Denver's Brian Sump named AAPEX Shop Owner of the Year
      DUB, TIS Wheels founder Myles Kovacs is SEMA Person of the Year
      AAPEX: Using social media to promote your business
    • Vaccine may usher sense of normalcy
      2020 Review: PPP loans give boost to small businesses
      Latest COVID relief bill includes $325B in small-business support
      AAPEX: Do more cars in the shop mean more profit?
    • General Tire Canada renews sponsorship deal with Raceline Network
      Apollo to raise prices of Vredestein brand, effective March 1
      Taiwan tire makers propose settlement of import duties case
      Kumho launches commercial LT, performance tire lines
    • Sponsored By Yokohama Tire Company
      7 questions to ask consumers when they need tires for a crossover SUV
      Sponsored By Yokohama Tire Company
      Stocking Tires for Crossover SUVs
  • SHOP FLOOR
    • BALANCING
    • DEMOUNTING
    • SAFETY
    • TIRE REPAIR
    • TPMS
    • TRAINING
    • VEHICLE LIFTING
    • WHEEL TORQUE
    • Video: Balancing Tire
      Choosing the right balancing equipment
      Safety tips for wheel balancing
      An introduction to wheel balancing
    • Video: Demounting
      Demounting Equipment
      Making rims ready for a tight seal
      Tire changer types, tips and trends
    • Video: Safety
      Making friends with OSHA
      Ergonomics on the shop floor
      Customers
    • Video: Tire Repair
      Tire repair: Shining a light on visual inspections
      Staying safe when repairing a tire
      Essential tools, materials and equipment for tire repair
    • Video: TMPS Service
      Decoding sensor data for TPMS diagnosis
      Replacement TPMS sensor overview
      The life-saving work of TPMS
    • Video: Training
      Advantages of apprentice program partnerships
      Options and resources for CE tech training
      Internship ideas to attract tech talent
    • Video:Vehicle Lifting
      All types of lifts for all types of work
      Tips and recommendations for lifting safety
      The gravity of proper lift points
    • Video: Wheel Torque
      Using torque sticks to speed service times
      The danger of too much, too little torque
      The importance of torque specifications
  • Multimedia
    • VIDEOS
    • PHOTOS
    • PODCASTS
  • Events
    • ASK THE EXPERT
    • LIVESTREAMS
    • WEBINARS
    • SEMA LIVESTREAMS
  • Data
    • DATA STORE
  • Resources
    • DIRECTORY
    • CLASSIFIEDS
  • ADVERTISE
  • DIGITAL EDITION
MENU
Breadcrumb
  1. Home
  2. News
September 02, 2015 02:00 AM

China plant expansion part of Conti's master plan

Crain News Service
  • Tweet
  • Share
  • Share
  • Email
  • More
    Print
    Continental A.G. photo
    Nikolai Setzer, a member of Continental's executive board and the head of Conti's Tire Division.

    By Chris Sweeney, Crain News Service

    HANOVER, Germany (Aug. 2, 2015) — Continental A.G.'s recent decision to boost annual capacity at its 4-year-old tire plant in Hefei, China, will allow the firm to start bidding on OE business in China in addition to filling demand from its growing replacement market customer base.

    That's the assessment of Nikolai Setzer, a member of Continental's executive board and the head of Conti's Tire Division.

    “You have to build over time your replacement market, which we did,” Mr. Setzer said. “We have in the area of 4,500 shops carrying our brand [in China]. We needed that time to ramp up the replacement business in accordance to our distribution power.”

    In the meantime, the firm started receiving strong interest from OE manufacturers, prompting the need to expand capacity to meet the incoming demand, Mr. Setzer said during Continental's TechShow in Hanover recently.  

    Tire Business photo by Chris Sweeney

    Holger Lange, head of winter tire development at Continental, talks about innovations in maximum grip during Conti's 'Tech Show' in Hanover, Germany, earlier this year.

    Conti disclosed a four-year, $280 million investment program in April that will boost annual capacity at the plant about 75 percent to 14 million car and light truck tires, along with boosting bicycle tire capacity six-fold to 13 million tires per year by 2025. The plant doesn't produce truck tires, but Mr. Setzer said the division is open to producing truck tires there eventually if demand dictates that kind of investment.

    Employment will more than double to 2,700 from 1,150. The firm did not disclose how much the building size would increase, if at all, from its current 753,000 square feet.

    Continental also has opened an R&D center for tires at the Hefei plant and broken ground in Jiangsu Province on a test center for the automotive division, with operations due to start in the first half of 2016.

    The center at the Hefei plant, built on an area of around 64,500 square feet, has created capacity to machine-test 6,000 tires a year and represents an investment of about $4.5 million. The facility will focus on developing and testing summer and winter tires for the Asia/Pacific market.

    “The guiding principle behind our growth in the booming Chinese automotive market remains our motto, ‘In the market, for the market',” Mr. Setzer added. The testing is designed to develop tires that will reinforce Conti's market position in the region.

    The Hefei investment — along with the recent greenfield factory openings in Sumter, S.C., and Kaluga, Russia — is part of a special investment project under Continental's Vision 2025 plan, which targets a better global balance of R&D, production and sales activities.

    Tire Business photo by Chris Sweeney

    Conti demonstrated at the TechShow that older-model cars equipped with the latest-generation tires can outbrake in wet conditions new cars shod with older-generation tires.

    That strategy, unveiled in 2013, called for $1 billion-plus in investments in new capacity by 2016. Conti already has eclipsed that, having invested more than $2 billion since then and  —if its annual investments of more than $350 million continue — eventually will spend close to $5 billion in the project when finished.

    The firm formulated the vision in 2010 with the intent to diversify its global footprint in North America and Asia-Pacific. Mr. Setzer said the Asia-Pacific region has one of the highest growth opportunities and gives Continental more independence from its strong European presence.

    “We said within our vision that we want to reach a podium position, which means that we belong to the best in our sector or industry technology-wise and in terms of balanced footprint,” Mr. Setzer said.

    When the firm started Vision 2025, tire sales were more than 65 percent concentrated in Europe, Mr. Setzer said. Most of the markets in Europe are mature with growth rates much smaller than that of China, India and South America.

    “It's not so important what ranking you have; our driving force is value creation,” Mr. Setzer said. “How to create value and sustainable value and reducing the risk in our portfolio is to grow in those areas where we have a lower presence and higher growth rates.”

    Each of the three Greenfield plants — in China, Russia and the U.S. — have entered their extension phase. Mr. Setzer said the next greenfield facility most likely will be in Asia-Pacific, with another possible greenfield in the Americas in the future, too.

    The executive said there should be at least one other announcement between now and 2025.

    “It depends on the market and the development of the market,” he said. “Versus the targets we established in 2011, we're on track.”

    Continental doubled its manufacturing capacity recently in Brazil, a plant that began operation about 10 years ago as part of its Vision 2025 plan. The firm doubled passenger tire capacity to about 8 million units annually and truck tire capability to more than 600,000 units annually.

    The 2014 World Cup also helped the firm build a bigger presence in the region.

    “We had a strong brand exposure in Brazil,” Mr. Setzer said. “Through 2014 we've been one of the main sponsors of the World Cup. Our brand was basically exposed everywhere, and we will continue to grow with a more known brand.”

    In addition to organic growth, Mr. Setzer said the firm is open to partnerships — either through acquisitions or joint ventures — if they support the tire maker's business strategy.

    One such strategic acquisition occurred in 2011 when Continental purchased Modi Tyres Co. Ltd. for about $25 million, integrating it as a subsidiary, Continental Tyres India Ltd. Within a year Continental expanded the factory to increase its bias-ply truck tire capacity by 230,000 units per year and added capacity for 900,000 radial car and truck tires annually — a $71 million investment from 2011-13.

    “If there are opportunities that bring us forward, we're looking into it,” Mr. Setzer said. “But if we don't see those opportunities, we're confident we can do it organically as well. It simply will take a little bit longer. We see even without any acquisitions or partnerships, we are able to reach our 2025 goals.”

    Continental has made a series of moves in the U.S. this year to solidify its still burgeoning ContiLifeCycle commercial tire retreading business, which it launched in 2010/11.

    Earlier this year Conti unveiled BestDrive L.L.C., a new business unit that took over operation of Conti retread plants in Arizona and Tennessee and added a retread plant/commercial tire service outlet in Taylor, Mich. Conti's planning to expand retread output to 200 tires per day from 60.

    More recently Continental/BestDrive acquired Hill Tire Co. Inc., a Forest Park, Ga.-based commercial dealership with five commercial tire locations in Georgia and Alabama and two retread plants, in a move to improve the market presence of the Conti truck tire brand in the southeastern U.S.

    Conti paid roughly $13.5 million for Hill Tire, which turns out more than 100,000 retreads per year using the Marangoni RingTread and ContiTread systems. The plants soon will phase out its RingTread production, Conti said.

    “We have a long-term plan to increase our distribution exposure and our network in the U.S.,” Mr. Setzer said. “We have opened retread facilities and are screening the market to see wherever we can team up and find partners to start and support retreading and lifecycle solutions with us. If we can't team up with anyone, we're willing to invest in our own shops. We want to have a national network.”

    ___________________________________________________

    Chris Sweeney is a reporter for Rubber & Plastics News, an Akron-based sister publication that first published this story.

    Related Articles
    Conti vows to improve customer service
    Conti budgets $43M for Hefei plant
    Conti boosting China R&D, testing
    Conti's General brand launches Grabber HTS60
    Conti to expand China tire plant
    Conti sees growing demand for car/LT tires
    Conti recalls 3,800 replacement passenger tires
    Conti's BestDrive unit buys Hill Tire
    Conti raises fiscal earnings forecast
    Conti rolls out run-flats from Slovak plant
    Tire makers' capital spending eases; Asia still tops
    Conti to double capacity at S.C. plant
    Letter
    to the
    Editor

    Do you have an opinion about this story? Do you have some thoughts you'd like to share with our readers? Tire Business would love to hear from you. Email your letter to Editor Don Detore at [email protected].

    SIGN UP FOR NEWSLETTERS
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    Newsletter Center

    Staying current is easy with Tire Business delivered straight to your inbox.

    SUBSCRIBE TODAY

    Subscribe to Tire Business

    SUBSCRIBE
    Connect with Us
    • Facebook
    • LinkedIn
    • Twitter
    • RSS

    Our Mission

    Tire Business is an award-winning publication dedicated to providing the latest news, data and insights into the tire and automotive service industries.

    tb-logo
    Reader Services
    • Contact Us
    • About Us
    • Site Map
    • Industry Sites
    • Order Reprints
    • Customer Service: 877-320-1716
    Partner Sites
    • Rubber & Plastics News
    • European Rubber Journal
    • Automotive News
    • Plastics News
    • Plastics News China
    • Urethanes Technology
    RESOURCES
    • Advertise
    • Privacy Policy
    • Privacy Request
    • Terms of Service
    • Media Guide
    • Editorial Calendar
    • Classified Rates
    • List Rental
    • Digital Edition
    • Careers
    • Ad Choices Ad Choices
    Copyright © 1996-2021. Crain Communications, Inc. All Rights Reserved.
    • News
      • OPINION
      • CORONAVIRUS
      • AUTO INDUSTRY
      • BUSINESS/FINANCIAL
      • COMMERCIAL TIRE
      • FACTORY FIXES
      • GOVERNMENT & LAW
      • INTERNATIONAL
      • MOTOR SPORTS
      • NEW PRODUCTS
      • RETAIL TIRES
      • SERVICE ZONE
      • SEMA/AAPEX
      • SMALL BUSINESS
      • TIRE MAKERS
      • SPONSORED CONTENT
    • SHOP FLOOR
      • BALANCING
      • DEMOUNTING
      • SAFETY
      • TIRE REPAIR
      • TPMS
      • TRAINING
      • VEHICLE LIFTING
      • WHEEL TORQUE
    • Multimedia
      • VIDEOS
      • PHOTOS
      • PODCASTS
    • Events
      • ASK THE EXPERT
      • LIVESTREAMS
      • WEBINARS
      • SEMA LIVESTREAMS
    • Data
      • DATA STORE
    • Resources
      • DIRECTORY
      • CLASSIFIEDS
    • ADVERTISE
    • DIGITAL EDITION