Continental has big plans for the Indian market

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Tire manufacturer Continental announced its expansion plans for the Indian market. Following the recent acquisition of Modi Tyres Co. Ltd. (MTCL), the new entity Continental India Ltd. is ramping up its operations in both replacement and OEM business in India.

Continental India will be increasing the production of the Modipuram plant to more than half a million bias truck and bus tires (TBX) as early as this year. There are plans for TBX production to grow continuously to more than one million units in 2013. In addition, Continental India announced further investments of more than 50 million Euros to start production of radial tires for passenger cars and commercial vehicles in the second half of 2013.

“In India, there is a rising demand for vehicles with high quality tires as well as premium technology,” says Nikolai Setzer, executive board member of Continental AG and head of the Tire Division. “Thus, we are convinced that radialization will be the driving force in the Indian truck tire market, and therefore our further investments of more than 50 million Euros in radial truck tire production will prepare a solid base in order to meet that demand.”

In the near future, Continental plans to manufacture radial tires at the Modipuram plant and will be able to offer both radial and bias tires out of local production. This move also will create further job opportunities as Continental India Ltd. plans to increase its headcount by more than a third from the current 1,600 employees up to 2,200 to 2,400 within the next few years.

At present, Continental has access to 110 regional distribution centers and about 1,400 dealers nationwide that provide links to truck fleets and end consumers. Fresh dealerships will be added at regular intervals. A major portion of sales historically came from aftermarket sales. While a strong focus will still be the tire replacement market, Continental also intends to build a significant share in OEM business in India.

“This is a milestone for our corporation in India,” saus Andreas Penkert, designated chief executive officer of Continental India Ltd. “Continental increased its sales in Asia at corporate level by almost 50 percent to over four billion Euros last year. We start this first direct initiative of the Tire Division here in India with full strength and dedication to make it a success – for our customers, for Continental and our employees, and for the region.”

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In July, Continental formally completed the acquisition of MTCL, which included the existing TBX plant in Modipuram, the tube plant located in Partapur and all related operational assets to those plants along with all customer relationships. Alok Modi, member of the founding family of MTCL, will be on the board of directors of Continental India Ltd.