Gold and black: Continental's colors ring truer than ever

Feb. 26, 2008

In 2007, Continental Tire North America Inc. completed its turnaround by finishing in the black in the Americas. Not it's time to go for the gold with its flagship brand.

The company's Commercial Division has been profitable for years. In 2007, its PLT Division added to the company's net profits in North and South America for the first time in a long time.

According to CEO Matthias Schonberg, that was despite a loss in the original equipment segment. However, the company "reduced the unprofitable business at OE."

In 2008, Continental will do more than ride the momentum last year's Fantastic Four marketing campaign created for the Continental brand. A new, even bigger promotion is planned for the second quarter, according to Dana Zamalloa, manager of public relations and communications.

Andreas Gerstenberger, executive vice president of sales and marketing, says the company tentatively will showcase two new Continental tire lines "dedicated to the Americas" at the Specialty Equipment Market Association Show in Las Vegas in November.

The company will add 194 Continental brand skus in 2008. The lineup will cover 76% of the replacement consumer tire market. In 2007, it introduced 274 Continental skus, which covered 72% of the market.

Prior to 2005, Gerstenberger admitted that the Continental brand was an "OE-driven sku lineup." The introduction of the ContiProContact in 2005 started to change that.

The Continental brand represents more than 50% of the PLT Division's replacement tire sales in the U.S. and Canada, and 20% in Mexico.

The introduction of the General Altimax family in 2007 also helped the bottom line by improving margins for both the company and its dealers, says Schonberg.

Continental will introduce 77 new General skus in 2008, after introducing 225 in 2007. The lineup will cover 79% of the replacement consumer tire market. (The General brand represents 35% of PLT's sales in the U.S. and Canada.)

By the end of 2008, 50% of the tires it sells in the Americas will be younger than three years old, adds Schonberg. The company will offer more skus but fewer lines, resulting in less complexity.

"We're spending $100 million on R&D for new Americas product," adds Gerstenberger.