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Analysts: Brazil Plant Will Help Conti Save 100 million

(Clacton, U.K./Tyres & Accessories) Following the news that Continental’s Bahia, Brazil plant is officially open, analysts have reported that the company’s decision to increase production in “low-cost” countries could save between 100 and 110 million US dollars.

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According to Deutsche Bank, this calculation is based on average per worker production of 6000 tyres/annum against “10 times lower” labour costs compared with the US. The report also suggested that the additional transportation/logistics costs incurred are equivalent two US dollars per unit.

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In addition to the previously reported opening in Brazil, Continental AG has recently expanded capacity in Malaysia, where the company is aiming to produce 6 million units by the end of 2006, rising to 8 million in 2008. When they were open, Continental’s Mayfield and Charlotte plants produced 5 and 8 million tyres respectively.

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