German Firm Establishes its First Tire-Manufacturing Base in China

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Researched by Industrial Info Resources (Sugar Land, Texas)--Tire and auto-parts manufacturer Continental AG (Germany), one of the world's top 500 enterprises, has announced plans to set up its first tire manufacturing base in China. The company has chosen the Hefei Municipality of Anhui Province in central China as the location and plans to invest a total of $219 million. The plant is expected to begin construction in mid-2008 and go into operation in the beginning of 2010. The required permits have not yet been granted by Beijing's central government.

Hefei, the capital of Anhui Province, is about 450 kilometers west of Shanghai. Anhui is Lower Saxony's partner province and has been turning into a major location for the growing Chinese automotive industry in recent years. Anhui also hosts numerous global players in the auto industry. Continental AG is the 38th top-500 enterprise to invest in the Province, and it is also the largest multinational company investing in manufacturing in Anhui.

The new plant will set up a qualification program and work with the local university to train employees. It is equipped with ultra-modern production and environmental technology. Continental envisions producing 4 million passenger tires annually in Hefei.

German Continental has been in cooperation with Shanghai Automobile Brakes Corporation (SABC) for 10 years. SABC has a history of several decades engaged in the manufacture of vacuum boosters, hydraulic brake hoses and other car parts.

In February 2007, Continental set up its Asian headquarters in Shanghai and later the Shanghai Continental Auto System Corporation. Continental also has a joint-venture dedicated to auto sensor manufacture. Continental is a leading automotive supplier of brake systems, chassis components, vehicle electronics, tires and technical elastomers. The corporation's global sales in 2006 stood at $21.8 billion, and its total workforce in the same year hit about 89,000. Continental Auto System plans to improve annual sales to $1.5 billion by 2010. Earnings through the company's tire business are expected to reach $219.2 million.

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