Conti reorganizes itself and takes transformation into account

In the new year, Continental aims to adjust to the transformation in the automotive industry with a strategic realignment. Going forward, Continental will be supported by three equal and independent business units: Automotive, Tires, and ContiTech.

Last year, in 2021, the truck tire market at Continental remained stable. However, the overall result was burdened by disproportionate increases in raw material costs. The reason was an "unprecedented material shortage of this magnitude." This is how Frank Jung, who heads marketing and sales for the replacement D tire business at Continental Tires Germany, summarizes the year 2021 from the tire manufacturer’s perspective. The logistics crisis exacerbated the situation. The shortage of professional drivers led to reduced vehicle capacities, while the economic cargo volume recently increased again. Additionally, some logistics providers withdrew from the tire business or imposed requirements, such as the shipment of products on pallets. Jung therefore expects further price increases in tire logistics.

“Already, the shortage of overseas containers – freight rates have quadrupled within a year – is a massive cost driver.”

Jung finds the development of fuel prices and the current Ad-Blue shortage just as concerning.

“And unfortunately, we have to assume that the situation in the transport industry will not improve in the short term. That's also why valid forecasts for future market developments are hardly possible.”

After almost two years of the pandemic, Jung does not see this situation normalizing for a long time. Disproportionate increases in raw material costs are additionally burdening the industry, he emphasizes. The semiconductor shortage is hampering the vehicle industry.

The passenger car and truck replacement tire business in Europe, the Middle East, and Africa has been reorganized under the leadership of Philipp von Hirschheydt. The consolidation of the truck and passenger car business into a comprehensive business unit aims to improve customer proximity and orientation as well as increase organizational efficiency. Instead of structuring by product categories, the organization will primarily be structured by customer groups—such as international key accounts, fleet customers, OEM aftersales customers, or customers in emerging markets.

With the turn of the year, Philipp von Hirschheydt transitioned to the automotive sector. He handed over his previous position to Ferdinand Hoyos, who most recently led the replacement tire business in the Asia-Pacific (APAC) region and was also Philipp von Hirschheydt's successor in that role.

In the German market, the two business areas for passenger car tires and for bus and truck tires are intended to grow together. Jung emphasizes that the German market is one of the most important markets for the company.

"Across all tire dimensions, the group generated 20 percent of worldwide total sales here."

The major future topics of sustainability, digitalization, and electromobility will come into focus for the group in 2022.

"By 2030, we aim to become the most advanced tire manufacturer in terms of ecological and social responsibility. We are consistently investing in researching and developing new technologies, alternative materials, and environmentally friendly production processes to make our tires even more energy-efficient and environmentally friendly in terms of manufacturing, use, and recyclability," confirms Jung.

Continental also sees great potential in the digitalization of tires and the expansion of new service offers for fleet and end customers. The company intends to use its tire and sensor connectivity to the cloud to offer completely new business models. Fleet customers will be able to check the condition of their tires at any time through a multitude of data points and specially developed algorithms. This is expected to result in increased safety, minimized downtime due to repairs, and a generally more efficient operation.

To keep up with the transformation of the vehicle industry, Continental must adjust its tires to the requirements of emission-free logistics. Tire tests will help in this regard. One test has been ongoing in Austria for some time. The Stiegl Brewery is one of eight Austrian companies in the trade, logistics, and production sectors with which MAN is conducting intensive practical trials of fully electric trucks in regular logistics operations. The companies are part of the CNL consortium, an initiative of 18 Austrian companies working together on the future topic of sustainable logistics under the leadership of the University of Vienna. The Conti Hybrid HS3 and HD3 tires have been in use for eight hours a day in urban areas and within a 50-kilometer radius around Salzburg.

"Electric drives are experiencing a dynamic demand development even in freight transport," says Jung.

He mentions the challenging target conflicts in tire research, where development partnerships with vehicle manufacturers are supposed to help. As an example, he cites the collaboration with Volvo and the Swiss Designwerk AG.

"Test drives are currently underway at the Contidrom, our test track near Jeversen, with an electric truck from the specialist for electric commercial vehicles Futuricum, which has been in regional service for DPD Switzerland since March this year."

The Futuricum vehicle is based on a Volvo FH, which was converted to electric drive by the parent company Designwerk Products AG. The 19-ton truck has 680 horsepower and, with a capacity of 680 kilowatt-hours, has an extremely large truck battery on board.

The vehicle has been in Swiss regional transport since early 2021 and is currently running on tires from the Conti EcoRegional product line. This line is designed for high mileage and low rolling resistance, aiming to enable the essential properties for the economical operation of electrically powered commercial vehicles.

"The current test series focus on further increasing efficiency, particularly on extending range through reducing rolling resistance."