FRANKFURT -- German car parts company Continental AG aims to double sales at its automotive systems division CAS in Asia to 1 billion euros ($1.17 billion) by 2010, it said, adding it would likely build a tire plant in China.
"Here (in China) it appears we will decide in favor of a greenfield factory rather than establishing a joint venture," Chief Executive Manfred Wennemer said in a statement on Monday, without giving details on when to expect a final decision.
Continental had earlier sought to form a JV with China's Doublestar to enter into the local tire market, but dropped that plan early in March after failing to gain majority control of the venture.
The move could increase the company's risk in China, however, as several analysts and industry executives say that a local partner with strong political connections is key for navigating through the country's bureaucratic pitfalls.
The company's CAS division, a key driver for group earnings, has been able to steadily improve profit margins thanks to strict cost management and brisk demand for its ESC electronic braking systems that help prevent deadly rollovers.
"By expanding our regional business in Asia, we are indicating that, much more than just taking note of this success (among Asian automakers), we aim to get in on it as well," CAS chief Karl-Thomas Neumann said.