Continental Tires plans major retail expansion in China

Continental Tires, the leading German tire manufacturer, is aiming to become one of China's top three tire makers and suppliers over the next five to six years through an aggressive expansion of its retail network.

Jay Dhillon, the general manager of Continental Tires China, said the company - the world's fourth-largest tire maker - saw rapid growth in its retail operation last year, its "most successful year", adding a further 1,000 authorized franchised stores giving it a total of 2,500.

It also expanded its production capacity during the year, investing $175 million in the second phase of its plant in Hefei, Anhui province.

"We will open another 1,000 authorized stores in 2013 - three a day - as well as deepen our footprint into more second- and third-tier cities, and maintain that speed over the next three years," said Dhillon.

"In 2012, Continental entered the second phase of our development in China, after establishing a stable foothold here. But we need to go much faster.

"We spent 80 percent of our marketing budget on opening shops and doubling our sales team in 2012," he added.

In February, Continental opened its 12th BestDrive flagship store in China, in Beijing.

These are larger auto stores, offering higher-end consumers with broader car services and maintenance.

It plans to double the number of BestDrive stores this year and add 10 to 15 a year for the next three to five years.

"Establishing BestDrive stores is a key initiative to propel our rapid growth in China, as well as a major step in building our presence in the local retail market, especially in the service sector," said Dhillon.

A recent report from consulting firm AlixPartners LLP showed that China's automobile service sector will grow at about 30 percent year-on-year on average between 2009 and 2014, driven by an increasing and aging vehicle population in the world's largest vehicle market.