Continental calls off Chinese venture

March 4, 2005

Continental AG has abandoned talks with the Quingdao Doublestar Tire Industrial Co. Ltd. that would have led to a joint venture with the Chinese tiremaker.

Continental called off talks "because, due to legal problems, we would not have held majority stake in the joint venture," Continental spokesman Hannes Boekhoff told today.

"As this was an important goal for us we had to act -- and stop talking."

Boekhoff says Continental remains on the look-out for a new partner in China to establish a tire manufacturing joint venture.

"We have not buried our plans for a production facility in China."

Last September, Continental and Quingdao signed a memorandum of understanding to form a joint venture this year.

Plans included tire production capacity hikes at the Chinese company's plant plus construction of a new passenger and light truck tire factory.