HEFEI, China (Dec. 7, 2015) — Continental A.G. has broken ground on Phase 3 of its expansion project at its tire plant in Hefei.
According to the company, the project has $272 million earmarked for the next two years and will see passenger car tire capacity increase to 14 million tires per year by 2019 from 5 million currently.
By May 2015, the company had produced 10 million passenger car and light truck tires, mostly for the China market.
“We are planning to have first tires of Phase 3 out in the last quarter of 2016. Further speed of the ramp-up depends on the market environment,” Michael Egner, general manager of Continental Tires (China) said following the groundbreaking ceremony on Nov. 16.
The company will pump additional investment into the bicycle tire segment to make the capacity rise to 13 million units per year by 2025 from 2 million.
“It is a long-term strategy, and we are at the moment in planning phase of this project,” Mr. Egner added.
The plant employs 1,150 staff and is expected to double the figure in 2017. The new capacity still is focusing on the China market, and the percentage of replacement tires is expected to increase.
“Even with fierce competition, China is still a big market for us and full of opportunities,” said Philipp von Hirschheydt, executive vice president of Continental's business unit replacement APAC.
“It's an important strategic undertaking that fosters the long-term development of Continental Tires in China.”
This report appeared on the website of European Rubber Journal, a United Kingdom-based sister publication of Tire Business.