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Continental expands low-cost production

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Continental Tire North America Inc. parent company Continental AG has announced plans to build a new plant in Brazil and boost its production in Malaysia in response to anticipated growth in North American market demand.

The new Brazil plant will represent a total investment of more than 250 million euros and will create an additional annual capacity of seven million passenger and 700,000 commercial tires within four years.

Construction will begin near the end of 2005 or the start of 2006.

The increase will mainly supply the United States, Canada and Mexico, "where the number of tires produced in low-cost countries is, to date, still very low," according to Continental officials.

Continental also is talking with Sime Darby, its production partner in Kuala Lumpur, about boosting tire manufacturing there and "is still looking hard for a cooperation partner in China."

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