Tire maker steers wheel East bound

BUDAPEST - Hürriyet Daily News

Continental presented its new Premier Contact 5 summer tire, and ContiWinterContact TS 850 at an event in Budapest.

Continental, the largest passenger-car tire maker in Europe, said it was shifting its focus to emerging markets, including Turkey, in order to compensate for losses from the jump in costs and the shrinking car market in Europe.

“Last year costs for our light vehicle, passenger car and commercial vehicle tire company and the rubber group increased an additional $1 billion euros on oil prices,” Alexander Bahlmann, public relations head of Continental’s passenger and light truck tire group, told the Hürriyet Daily News on the sidelines of a media event to present new products in Budapest. “The only thing we can do is to increase prices as we did last year.”

However, the executive said he thought petrol prices, a leading input in tire industry, would remain stable at a high level. The European market does not promise a lucrative year for tire makers, as the car industry foresees a shrinkage in both sales and production, an effect of the ongoing euro crisis. This has prompted Continental to boost its efforts to become stronger in emerging markets, particularly in BRIC nations.

About to launch in China

The tire maker is about to launch its China business with 4 million items annually, Bahlmann told the Daily News. It expects to finalize the construction of a plant in Kaluga, Russia by the end of 2012. Continental also already produces 4 million items a year in Brazil, and its official 2015 target for the South American country is 9 million items. The company acquired India’s Modi Rubber as a part of its growth plan and is eyeing growth in the U.S.

The company would consider supplying original equipment for a possible Turkish car, Bahlmann said. The Turkish government is pushing the car industry to build a domestic brand, and Fiat’s Turkish partner Tofaş and Renault have already shown an interest in the bid. However, Continental’s current goal for Turkey is to increase its market share to more than the current 10 percent, said Mehmet Akay, the Turkey unit passenger-car tire sales manager.

One of the hottest topics in the car industry is the compulsory European Union tire label, which will be valid starting from November 2012 in all 27 EU states. The label specifies three tire properties: rolling resistance, wet braking performance and external tire/road noise. Bahlmann said he welcomed the implementation, which will become stricter in time. Still he says a number of other criteria should also be highlighted, particularly for winter tires. Andreas Topp, head of Continental’s technical benchmarking, said the EU label would help rid poor property brands.