Continental AG eyes 3-5 pct tyre price hike – paper

FRANKFURT, March 8 (BestGrowthStock) – German automotive supplier
Continental AG (CONG.DE: ) aims to raise prices for tyres by 3-5
percent soon, the Automobilwoche newspaper quoted the head of
its passenger car tyre business as saying.

“We will leave the exact scope of the adjustments to the
people responsible for individual markets but probably the
increases will be in the area of 3-5 percent,” Nikolai Setzer
was quoted as saying.

Continental — the world’s fourth largest tyremaker after
larger rivals like Michelin (MICP.PA: ), Goodyear (GT.N: ) and
Bridgestone (5108.T: ) — is highly dependent on the strong cash
flow from its Rubber Group division to reduce the group’s 7.85
billion euro ($10.7 billion) net debt pile.

Setzer said he expected flat markets in Europe this year but
a 20 percent rise in the North American market.

Europe’s market for replacement tyres was showing “positive
signals” for “growth of 2-4 percent”, while Asian markets,
especially China, were poised the grow even faster, the paper
quoted him as saying.

He said the long winter had helped boost tyre sales and that
the rubber business had saved around 250 million euros on
purchasing costs in 2009 but added: “Unfortunately prices,
especially for natural rubber, have rushed back to pre-crisis
levels.”

Last month, Continental said it expected Rubber Group to
sustain its 2009 results of 1.04 billion euros adjusted EBIT
this year despite a raw material burden of around 200 million
euros assuming natural rubber costs more than $3 per kilogram.
($1=.7307 Euro)

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(Reporting by Michael Shields, additional reporting by
Christiaan Hetzner; Editing by Jon Loades-Carter)

Continental AG eyes 3-5 pct tyre price hike – paper