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Interview with Karlheinz Evertz, Head of Passenger and Light Truck Tires Original Equipment Worldwide

Mar 22, 2013

Hanover, March 2013. In the area of passenger and light truck tires, Continental is one of the world automakers’ most important manufacturers. Karlheinz Evertz, head of Research and Development for Tires at Continental, ventures an outlook for the tire industry in the OE sector.

Continental currently supplies passenger and light truck tires under the Continental premium brand for almost one third of all new vehicles marketed by European automakers; in the USA, it supplies more than 15 percent in this sector. In which regions are you aiming for further growth?

Karlheinz Evertz, Head of Passenger and Light Truck Tires Original Equipment Worldwide

In 2012, we once again successfully defended our previous years' market position in the European passenger and light truck tire original equipment sector; in the NAFTA region, we achieved a market share of over 15 percent. In the coming years we look to Asia for the greatest growth opportunities. We want to better serve this rapidly growing region with tires from our plant in Hefei, China. This will allow us to underpin the development of global premium vehicle manufacturers there with our premium tires. In Hefei, we are already preparing to expand annual capacity to eight million passenger and light truck tires per year. South America also plays an important role for our business, because the number of premium vehicles is rapidly increasing there as well. We have already laid the foundations for this at our plant in Camaçari, Brazil, where we are currently set to double annual capacity to nine million passenger and light truck tires by 2015. Of course, Russia must also be included on this list. In the foreseeable future, this market will develop into one of Europe's most important markets, and we will be supplying original equipment customers with products from our new tire plant in Kaluga as of the end of 2014.

What are vehicle manufacturers currently focusing on with regard to tire performance; what trends must you keep track of?

For some years now, the requirements for reducing rolling resistance have been steadily increasing. And that is to be achieved without any compromising of competing properties in the safety area, such as wet braking and abrasion. Another aspect is the trend to ever larger tire diameters and sizes, whereby we, as the leading tire manufacturer, adhere to the vehicle manufacturers' specifications. Finally, there is also the broad, but still not very specific field of e-cars. Forecasts are still very mixed as to how significant this market will turn out to be. Regardless of how things develop here, we can serve this specific market with our Conti.eContact and Conti.eContact Winter tires. Our product lines put us in good stead to address the trends cited.

ContiEcoContact 5, ContiPremiumContact 5, ContiSportContact 5

What role do releases for winter tires play for your business?

In terms of volume, winter tires do not play a major role in our original equipment business. They are, however, an important way of fostering customer loyalty in the car dealer business and are therefore of central importance to the passenger and light truck tire replacement market overall. With new vehicle sales declining, the winter tire business is now an essential additional business for our customers and one with additional growth potential, especially in the UHP segment. However, we need special technical winter tire releases from several manufacturers before we can supply these with the respective additional marking (BMW > *, Audi > RA1, Mercedes-Benz > M0, Porsche > N1).

Are there releases that particularly stood out for you in 2012?

In Europe, we again received a wide range of summer tire approvals in 2012. We were very pleased with those from premium manufacturers: from Audi for the S8, A8, A7, A6, RS4, and A3; from BMW for the 1 and 3 Series GT; from Mercedes-Benz for the A-, B-, C- and S-Class; from Porsche for the Cayman and Panamera; from VW for the Touareg Hybrid, the new Passat for the U.S. market, the Amarok and the up; from Land Rover for the new Range Rover; from Maserati for the Quattroporte; and from Toyota for the Vios.

What are the long-term prospects for original equipment collaboration with vehicle manufacturers in the dynamically growing BRIC countries?

Almost all manufacturers are making the rounds in this region to cash in on the dynamic growth there. We support them in this with our premium products and have significantly improved our own growth opportunities with our plant in China. Our key account management structures represent an important factor for success in our business relationships. They are unique in the industry and allow manufacturers to conduct their global business with just one main passenger and light truck tire contact at Continental. This increases efficiency and ensures mutual across-the-board understanding.

What do you think is in store for the global original equipment business in passenger and light truck, 4x4 and van tires in 2013?

We expect global vehicle sales to grow by around two percent in 2013, with European sales remaining slightly below 2012 levels, while sales in The Americas will rise by two to three percent and sales in Asia will be up three to five percent.

ContiSportContact 5 SUV, ContiCrossContact LX 2, ContiSportContact 5 P

Contact:

Alexander Bahlmann

Head of Media & Public Relations

Continental AG l Division Tires

Continental Reifen Deutschland GmbH

Buettnerstraße 25

30165 Hanover, Germany

Phone: +49 511 938-2615

Fax: +49 511 938-2455

Email: alexander.bahlmann@conti.de

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Klaus Engelhart

Press Spokesman

Passenger and Light Truck /
Two-Wheel Tires

Continental AG l Division Tires

Continental Reifen Deutschland GmbH

Buettnerstraße 25

30165 Hanover, Germany

Phone: +49 511 938-2285

Fax: +49 511 938-2455

E-Mail: klaus.engelhart@conti.de

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