From Tire Review/Tyres & Accessories

Continental AG has taken a step toward the Indian market after the tire manufacturer and automotive supplier signed an agreement with Modi Rubber Ltd. to acquire a 100 percent shareholding of its Modi Tyres Co. Ltd. subsidiary.

According to both companies, the completion of the transaction still depends on the fulfillment of certain conditions, including regulatory requirements. At the completion of the transaction, Modi Tyres Co. Ltd. will become a wholly owned subsidiary of the Continental Group.

No further details on the price, strategy or method of investment behind the proposed deal are available. However, in answer to Tyres & Accessories’ questions, a Continental spokesperson said the company will “focus on local production and distribution of bias and radial truck/bus tires as well as radial passenger car tires for the Indian market.” While the specifics of the deal remain to be seen, the inclusion of radial production in the company’s statement could be seen as a hint that the firm has plans to upgrade machinery or increase radial output at Modi.

According to the company, this latest development underlines Continental’s commitment to the Indian market and is part of the company’s strategy to invest in growing markets in Asia for its core businesses: “India is a growing market and we see huge potential here. With further economic development and global exposure, this will continue to develop, and there will be a demand for vehicles with high quality tires. Technologically too, there is development at a fast pace. We are confident that this market will be keen to leverage our international experience, technical expertise and now our local presence.”