RUSSIA: Continental AG setting up JV with Moscow Tyre Plant

By just-auto.com editorial team | 12 September 2002

Continental AG and the Moscow Tyre Plant (MTP) have signed an agreement establishing a joint venture. According to the agreement, MTP will make part of its site available for the construction of a modern tyre production facility.

The new company, of which Continental holds a majority share, will produce car and light truck tyres.

Over a period of three years, Continental will be investing about 30 million euros in the joint venture. Continental says that this investment and the transfer of know-how will make it possible to produce roughly 1.5 million tyres annually after the start-up of production in autumn 2003.

Output is scheduled to be increased to 3.4 million tyres per annum by 2006. The company is planning the production of Continental and Barum branded tires for the local market.

At the signing ceremony with Vladimir Ezhov, Director of the Moscow Tyre Plant, Dr. Hans-Joachim Nikolin, Member of the Executive Board of Continental AG, stressed that Continental has taken a major step in developing the rapidly growing market in Russia.

"Continental is one of the first tyre manufacturers with global operations that is undertaking its own production in Russia", said Nikolin.

The city of Moscow owns 51 percent of MTP.

Continental reports that there is strong demand in Russia for replacement tyres for western medium-class and premium cars despite the high customs duties and taxes, which increase the price of imported tyres by over 70 percent.

The Continental subsidiary Barum, located in the Czech Republic, supplies the Russian vehicle marque Lada with about 300,000 tyres per annum for original equipment and some of these will be provided from the new joint venture in the future.