Continental AG is to switch suppliers for the majority of its car tyre inner tubes to Metro Tyres of India and away from Sava dd of Kranj, Slovenia. Meanwhile Metro is building a â‚¬6-million inner tube plant outside New Delhi, India.
The deal will mean Conti scrapping current agreements with Sava, which also owns 20 percent* of the Goodyear-controlled Sava Tires joint venture, and shifting the production from Kranj to the Indian unit. A spokesman for Conti said the company continues to buy some tubes from a Korean supplier, but Metro will be Conti's largest supplier of tubes for the global market. Thomas Peter, head of Continental's car tyre inner tube business, said, "We will be sourcing tyre tubes, branded Continental, for passenger cars, trucks, tractors and light commercial vehicles [from Metro]."
Meanwhile, Metro is building a new tube factory outside Delhi with approximate capacity of 3000 tonnes per year. Conti expects to absorb roughly half of this, while Metro will use the remaining capacity to make tubes for the domestic market.
* SInce this story was written, Goodyear has announced plans to buy Sava's stake in Sava Tires, leaving it as a wholly-owned Goodyear subsidiary.
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Times of India story
Financial Express (India) story
Financial Express (India) story on potential partnership between Conti, Metro