HANOVER, Germany (Dec. 10) — Continental A.G. has decided to pull out of its joint venture with Moscow Tyre Plant, citing "external influences" that were interfering with the venture's ability to attain its objectives.
Moscow Tyre has assumed all of the shares previously held by Continental. The two parties agreed not to disclose details of the agreement.
Conti and Moscow Tyre had created the 76/24 venture in September 2002, when Conti said it would invest nearly $30 million to build a production facility adjacent to Moscow Tyre's existing plant. The project was designed to produce 1.5 million tires a year initially, with capacity to more than double by 2006 to 3.4 million units.
The external influences referred to relate to an apparent change in the Russian government's position on the future of large-scale industrial operations in residential areas, notably in Moscow, company spokesmen said recently.
The annulment of the venture will leave Conti with a financial burden of about $40 million, which already has been factored into the company's forecasts for the year.