HANOVER, Germany—Continental A.G.'s Tire Division is investing about $280 million during a four-year period at its facility in Hefei, China, to boost capacity to 14 million car and light truck tires per year.
The project also will increase bicycle tire production to 13 million tires per year by 2025.
Continental said employment will more than double to 2,700. The 753,000-sq.-ft. facility currently employs 1,150. The firm did not disclose how much the building size would increase, if at all.
Nikolai Setzer, a member of Continental's executive board and the head of the Tire Division, said at the firm's TechShow in Hanover on June 9 that the firm's initial goal in China was to build its replacement business and during that span began the process of gaining approvals from original equipment manufacturers.
Now that the firm has received strong approvals from OE manufacturers, it is ready to expand capacity to meet the incoming demand.
“You have to build over time your replacement market, which we did,” Setzer said. “We have in the area of 4,500 shops carrying our brand. We needed that time to ramp up the replacement business in accordance to our distribution power.”
The facility in Hefei also produces Continental's commodity bike tires not just for the region, but for the global market. Setzer said Continental has a two-fold strategy in regard to bicycle tires—the commodity and the premium market. He said E-bikes are becoming more prevalent with the rise of leisure sports in the more mature markets, but currently the vast majority of bicycle tires remain in the commodity range.
Continental's only tire plant in China does not produce truck tires, but Setzer said the division is open to producing truck tires eventually there if demand dictates that kind of investment.