Continental AG's tire division is gearing up for the vehicles of the future. Nikolai Setzer, Conti's management board member in charge of car tires, discussed the latest trends, including how tires will change for electric vehicles, with Henning Krogh, a staff reporter at Automobilwoche, the German sibling publication of Automotive News.
Many automakers are turning to electric power for future vehicles. Does electric drive require the development of a new kind of tire?
It has become apparent that there will be new tire dimensions, and there is often no standardization for them. We will need narrower sizes since a reduction in air resistance is especially important in electric vehicles.
And the wheels will end up larger. We have to optimize the design of the tire sidewalls to minimize energy-consuming compression. Technologically, this is not completely new territory. But the appearance of the tires will take some getting used to.
More customers are looking for green tires that improve fuel economy. How well are you prepared for this?
We are working on the reduction of the rolling resistance of our products as a top priority. But in the process, you have to manage a technological balancing act. Under no circumstances can braking behavior suffer in tires optimized for rolling resistance -- under wet conditions, for example.
Vehicle safety is especially important now to consumers and the auto industry. What lessons have you drawn from the Toyota safety recall?
We have had our own experience in the U.S. market and learned that we have to develop market-specific tire products for the different sales regions of the world. And we keep adjusting our quality checks to the changing conditions of the respective market environment.
Was 2009 a crisis year for your tire business?
The crisis hit us hard in original equipment. To some extent, there was a substantial loss of business with automakers. On the other hand, the declines in the replacement business were considerably smaller. And the harsh winter led to good sales of winter tires.
The crisis also had a positive side: The prices of many raw materials fell, saving Conti's rubber group about 250 million euros [about $341 million]. Unfortunately, prices have rebounded to their pre-crisis levels, especially for natural rubber.
How do you assess the tire market for 2010?
In Europe, we expect a flat market in production. But in North America, we expect a substantial recovery of about 20 percent. But the level was at a historic low in 2009. It can almost only go up.
We also see positive signs for original equipment in Europe, where we expect growth of 2 percent to 4 percent. In Asia, especially China, the growth should end up considerably stronger.
Are you planning to increase prices?
Yes. We are leaving the exact scope of the adjustments to the responsible parties in each market. But it's projected that increases will be in the range of 3 percent to 5 percent.