HANOVER -- German tire and car parts maker Continental AG and its Swedish rival Trelleborg said on Thursday they have been in talks on cooperation in the production of tires for agricultural machinery.
"We do have contacts with each other. ... That's mainly for the segment of agricultural tires," Trelleborg's spokesman Mikael Bystroem told Reuters.
He added Continental was not the only company Trelleborg was speaking to, but did not name any of the others.
A Continental spokesman confirmed the talks. None of the parties gave any details on a potential deal, which would mainly involve Continental's Czech unit Barum.
Continental has said it would dispose of unprofitable business in response to the depressed auto industry.
An industry source told Reuters that due diligence inquiries into the Czech unit are currently underway, probably for Trelleborg.
Continental has shut five plants since the end of 2001 as part of a restructuring program.
Trelleborg makes tyres for forestry, industrial and agricultural machines. It bought Pirelli's agricultural tyre unit in 1998 and has an acquisitive reputation.
Continental is one of Trelleborg's main competitiors both in industrial tires and in the farm market.