HANNOVER - Continental AG is rapidly building synergies between its tire business and Continental Teves, the brakes and chassis unit acquired in 1998 from ITT Industries.
The German tire maker will start production of its Intelligent Tire System (ITS) in 2002 for a 2003 production model, said Chairman Stephan Kessel (see story, Page 3). He did not name the customer, but said it would be a global platform.
The system uses tire-based sensors to control a car's brake and traction control functions.
Continental posted a 34 percent increase in earnings before interest and tax last year to A511 million on a 35 percent rise in group sales to A9.1 billion. Sales were boosted by strong demand for tires and the first consolidation of Continental Teves.
'The numbers show clearly that the combining of tire, brake and chassis technology is already beginning to bear fruit,' Kessel said.
Kessel is confident of long-term volume growth but said the immediate job is to manage the ITS technology and find partners.
Since acquiring the brake and chassis unit from ITT for $1.9 billion in 1998, Continental has been growing its wheel-tire business and corner module assembly operations. Tires now count for less than half of Continental's sales, down from two-thirds.
'We started with complete wheel assembly and we are going to full corners,' said Kessel. 'We have some challenging projects for corners, which includes suspension components that we purchase from other suppliers.'
But Kessel said Continental is more interested in systems integration than modules.
Continental is investing $40 million in a new NVH (noise, vibration and harshness) center for its tire and chassis systems business. The center will open in late summer just outside Detroit.
'We will soon be in a position to offer worldwide cooperation with our customers for the chassis of the future,' said Kessel. 'We will be able to combine all the skills of Continental and offer real systems know-how. As well as being able to provide judgement of ride and noise, we will be able to improve the whole of the process in a chassis - from the way it feels on the road, to the way it sounds to a driver or passenger.'