From Tire Review/Tyres & Accessories

HANOVER, Germany -- On Aug. 1, Continental AG will finally bring together its two independent tire arms into one cohesive group.

On that day, Conti's Passenger & Light Truck Tires (PLT) and Commercial Vehicle Tires (CVT) divisions will be consolidated into a single unit known simply as the Tires division. This combined division will be headed up by Nikolai Setzer, who has led the PLT division since joining the company’s executive board in August 2009.

Current CVT division head Hans-Joachim Nikolin has resigned from Continental on “highly amicable terms” and will leave the company on July 31. Conti’s supervisory board gave its consent for Nikolin’s relinquishment of his office by mutual agreement at a meeting on June 7.

How the consolidation will impact local markets, such as with Continental Tire the Americas, which operates two separate tire units with separate leadership, is not understood as yet.

Explaining its decision to merge the two divisions, Continental notes that with 2010 sales of around 1.4 billion euros, EBIT of 50 million euros and approximately 7,100 employees, the CVT division is far and away the smallest of its six divisions. Last year the PLT division realized sales of 5.8 billion euros and an EBIT of close to one billion euros. It has over 28,000 employees.

Combined, sales in the two tire divisions worked out to around 7.2 billion euros in 2010 – and they constitute the corporation’s largest division.

“The tire business numbers among Continental’s core competencies,” stated Continental Executive Board Chairman Elmar Degenhart. “The business segments in PLT and CVT are increasingly up against similar challenges of a major caliber. This finds them moving closer together all the time. Our goal is a step-up in profitable growth worldwide, above all in the emerging markets. In forming a single tire division, we are now consolidating our forces to achieve this end. Above and beyond this, we are creating a more pronounced balance in our business structure at the corporate level.

“With Nikolai Setzer we have an established and experienced executive,” Degenhart continued. “He has known our passenger tire business for many years now, tackling different assignments and holding various management positions. In the last two years he has successfully and vigilantly overseen the business.”