Thomas Sattelberger, Continental board member for human resources, told local newspapers that the company plans to double production at its ContiTech unit in Timisoara and increase staff at its research centre in Sibiu to 300 employees, from almost 200 at present.

Continental also announced plans to expand the Timisoara-based Continental Automotive Products plant, with its production capacity set to rise to 16 million tyres per year by 2008, from current levels of 12 million. Following the recruitment drive Continental, said to be the largest German investor in the local car parts industry, will have a total of 5,000 employees in Romania by 2010, compared with 3,500 at the moment.

According to Deutsche Bank analysts, this is equivalent to an additional 8 million units of capacity – 10% of its European production. “Due to five times lower wage in Romania than in Western Europe, this move gives the company a competitive cost structure advantage equivalent to 10 per cent of selling price. This should allow the group to keep EBIT margin in excess of 20 per cent in Europe,” the analysts added.

Continental group has invested more than 250 million euros in Romania so far and reached turnover worth above 260 million euros last year, according to Romanian Finance Ministry data. Approximately 90% of Continental production in Romania is currently exported.

Continental will also boost investments in the training of its current or future employees by setting up an education programme in partnership with the technical universities in Sibiu and Timisoara. This is expected to make the recruitment drive easier as most of the new employees will be young graduates, especially as far as workers at the expanded research and development centre are concerned.

Continental began its investments in Romania in 1998 by building a plant manufacturing car tyres in Timisoara. It later built three automotive parts plants, set up a research centre and built a steel cord plant together with Italy’s Pirelli group.