Summer Internship Project

Report on

Study of market Analysis of Continental Tyres In Car segment

SUBMITTED TO

INDIRA INSTITUTE OF MANAGEMENT, PUNE

POST GRADUATION DIPLOMA IN MANAGEMENT

BY

Pawar Sushant Namdev

(PGDM BATCH 2018-2020)

UNDER THE GUIDANCE OF

Dr. Neha Jain

INDIRA INSTITUTE OF MANAGEMENT PUNE

(TAPASYA, PUNE-411033)

1
 INDEX

Sr. No PARTICULARS PAGE NO.

1 Executive summery

2 Introduction and Rationale of the study

3 Industry/Sector Profile

Company Profile
4

5 Theoretical and conceptual framework

6 Objectives and scope of product

Action Plan
7

8 Analysis and Findings

9 Conclusion/ recommendations

10 Key learnings

11 Bibliography/References

12 Glossary

13 Annexures

2
 LIST OF TABLE

Sr. No Table no Page No

LIST OF FIGURE

Sr. No Figure no Page No

3
 ‘‘Study of market analysis of Continental Tyres in Car segment’’

CHAPTER I: INTRODUCTION AND RATIONALE OF THE STUDY: -

INTRODUCTION TO THE TITLE

SIGNIFICANCE OF THE PROJECT:

Objective of study-

 To know about how continental is playing in the market regarding market

share
 To familiarize Continental tyre among the people.
 To identify competitors of Continental tyres prevailing in the market
 To know the perceptions and views of garage owners so as to improve the
strategies of the company to upgrade the parameters of tyre or company
policies.
 To carry out the campaigns in pune city.

Action plan-

 Meeting most of the Garage owners in pune and check the monthly off take
of Continental Tyres and other tyres and taking feedback.
 Meeting new Garages and pitching them about the schemes and offers which
is given by the company to its customers.
 Brand promotion by conducting campaigns in socities by handing
Complimentary gifts.
 Converting the potential customer.

4
CHAPTER II: INDUSTRY/SECTOR PROFILE –
OVERVIEW OF THE INDUSTRY/ SECTOR :
 Transport is the life- blood of civilization and it plays a key role in the
economic, social, cultural and political progress of the economy. The
manufacturing of automobile tyres became an essential ancillary activity
for the development of the automobile sector. The major raw material
required by the tyre industry is rubber. Of all major end- use markets for
rubber, transportation is by far the largest single sector with tyres and tyre
products accounting alone for over 50percent of Natural Rubber NR
consumption.
 Truck and bus tyres would represent the largest single outlet for NR,
followed by automobile tyres. The main consumers of natural rubber are
tyre makers. According to Automotive Tyre Manufacturers Association,
there are 23 percent growth in tyre manufacturing during the period from
2010 April to 2011 February. In world scenario, the tyre industry’s
turnover is more than $ 130 billion. It employs more than 600,000 people
directly and several millions indirectly. A dozen global players dominate
the tyre industry.
 The top five manufacturing companies by revenue are Bridgestone,
Michelin, Good Year, Continental AG, Pirelli. In 1846, Robert William
Thomson invented and patented the pneumatic tyre. Pneumatic tyres are
manufactured according to relatively standardized 43 processes and
machinery ,in around 450 tyre factories in the world. Over 1 billion tyres
are manufactured annually, making the tyre industry the majority
consumer of natural rubber.

5
 The origin of the Indian Tyre Industry dates back to 1926, when Dunlop
Rubber Limited set up the first tyre company in West Bengal. At present,
there are 40 listed companies in the tyre sector in India. Major players are
MRF, JK Tyres, Apollo Tyres, CEAT, BIRLA, and GOOD YEAR which
account for 63 percent of the organized tyre market.
 Current level of radialization includes 95 percent for all passenger car
tyres, 12 percent for light commercial vehicles and 3 percent for heavy
vehicles (truck & bus). Restrictions were placed on the import of used/
retreaded tyres since April 2006. Import of new tyres and tubes is freely
allowed, except for radial tyres in the truck/bus segment which has been
placed in the restricted list since November 2008. Indian tyre industry
produces the complete range of tyres required by the Indian automotive
industry , except for aero types and some specialized tyres.
 Domestic manufacturers produce tyres for trucks, buses, passenger cars,
jeeps, light trucks, tractors,( front, rear ,and trailer ),animal drawn vehicles
, scooters, motor cycles, mopeds, bicycles, and off – the – road vehicles
and special defence vehicles. The productivity of rubber in Kerala is the
highest in the world. For a long time now, domestic prices of rubber are
much lower than international prices. India has signed the ASEAN
agreement.
 Nature of the Industry:
Tyre Industry is highly raw-material intensive. Raw materials cost
accounts for approx. 63% of tyre industry turnover and 72% of production
cost. The industry is a major consumer of the domestic rubber market.
Natural rubber constitutes 80% while synthetic rubber constitutes only
20% of the material content in Indian tyres, 62% of total Natural Rubber

6
 consumption is by the Tyre Sector, balance by rubber based non-tyre
industries. Interestingly, world-wide, the proportion of natural to synthetic
rubber in tyres is 30:70.

CONTRIBUTION OF THE SECTOR TOWARDS GDP

Growth, investment and value multiplier :
 The tyre industry on a standalone basis contributes 3% of the
manufacturing GDP of India and 0.5% of the total GDP. However, its
estimated output multiplier effect is 2.47 due to linkages with other
sectors of the economy including rubber plantations, petroleum,
chemical, capital goods and packaging materials, etc. resulting in a
total economic contribution of 1.5% of the GDP when direct, indirect
and induced impacts are considered.
 Indian tyre industry has almost doubled from ~Rs 30,000 crores in
2010-11 to ~Rs 59,500 crores in 2017-18 of which 90-95% came from
the domestic markets. The top three companies – MRF, Apollo Tyres
and JK Tyres have ~60% of the market share in terms of revenue. In
terms of segmentation tyres can be divided in two ways – based on
end market and based on product.
 By 2019-20, the industry is expected to complete projects worth
₹7,000 crore, contributing an additional 12 million units in capacity.
Such investments in capacity create better economies of scale,
employment and value addition for the economy.
 Tyres have a high manufacturing value addition (MVA) of 21.5% as
against a median of 14% for the manufacturing industry with
corresponding value added multiplier effect of 3.42, implying that an
unit of increase in demand for tyres has a multiplying and cascading
effect of 3.42 on the overall economy and hence should be a flagship
sector that requires greater attention under the “Make in India”
programme.
 Tyre makers will invest around Rs 20,000 crore over the next three
years as the industry is optimistic that demand would grow by 7-9 per
cent during FY19-23. Despite subdued vehicle production levels in

7
 the past six months due to a dip in consumer sentiment, the domestic
tyre demand is estimated to have grown by 9-11 per cent in FY19.
 A major chunk of it came from the replacement market. In April-
December FY19, the tyre industry increased production by 11 per cent
to 146.351 million tonnes from 132.314 million tonnes during the
same period the previous year, according to Automotive Tyre
Manufacturers Association.

 Indian Tyre Industry: An Economic Force Multiplier

 The tyre industry provides the wheels on which an economy rides. It
provides the end of the chain for the natural rubber industry in India and
is vital for the automotive industry – both original equipment
manufacturers and those in after markets. The tyre industry also has a
large dependency on the petroleum industry as a significant proportion of
synthetic rubber and other petroleum products is also used for tyre
production. The industry involves about 0.5 million people who directly
and indirectly derive their livelihood from the industry, involving farmers
and agriculturalists,0 .15 million in manufacturing and about 1 million in
service and after markets.
 The Government of India and Indian Automotive Industry has developed
a collective vision plan referred to as “Automotive Mission Plan 2016-26
– AMP 2026”. The AMP 2026 aims to propel the Indian Automotive
Industry to be the “Engine of the Make in India Programme”. The
objective of AMP 2026 is “where the vehicles, auto components and
tractor industry should reach over next ten years in terms of size,
contribution to India's development, global foot print, technological
maturity, competitiveness and institutional structure and capabilities”.
AMP 2026 has set some speciic targets for the year 2026:
• 12% of the country's GDP (from 7% at present)

8
 • 40% of manufacturing GDP
• Output of ₹16,160-18,885 billion for economic growth at the rate of 5.8-
7.5%
• 65 million new jobs
• ₹7,575 billion of exports
 Contributing to Employment :
The Annual Survey of Industry (ASI), MOSPI data reveals that the tyre industry
provides direct employment to more than 0.15 million people, which is about
0.12 million in the organised sector. It also provides livelihood to over 1 million
people such as retreaders dealers and repairers directly and indirectly associated
with this industry. The employment generated by the industry in the services
such as tyre retreading, repairing, air filling, etc. when taken into account is very
significant.
 Contributing to Foreign Earnings :
The tyre industry exports about 9-10% of its total production to over 100
countries and contributes about 0% of the country's total exports with average
net foreign earnings for the last five years being about $ 1.0 billion. Currently,
India's contribution to the global tyre trade is $1.5 billion (1.72%) out of a $80
billion market. Given the fact the industry is highly competitive, there is
headroom for tyre exports from India, where it can increase its share to 4 - 5%
when adequately supported.

Exports :
Tyre exports are estimated to grow by 8-10 per cent over the next three years
led by stable demand and increased acceptance of Indian tyres in overseas
markets, both in terms of quality and pricing. It was around 9 per cent in FY

9
 2018.

However, with rising penetration of low cost Chinese tyres in overseas markets,
especially post the removal of anti-dumping duty (ADD) by the US on the
Chinese tyres in February 2017, competition from China (both in terms of
volumes and pricing) will remain a key challenge, as per and ICRA note.

For FY 2019, the unit and tonnage growth is pegged at 8-8.5 per cent and
6.5-7%,respectively.
Top destinations for exports include US, Germany, France, UK, Italy,turkey,
Netherlands,spain,andBrazil
The US and EU countries are the top potential markets for exports, and the
driving factor would be the Government signing trade agreements with these
countries which can provide concessional tariff for tyres.

MAJOR PLAYERS IN THE INDUSTRY :

IN INDIA :
1. Apollo Tyres.
2. JK Tyrs and industries Ltd.
3. MRF Tyres Ltd.
4. CEAT Ltd.
5. Balkrishna Industries Ltd.
6. TVS Srichakra Ltd.
7. Goodyear India Ltd.
8. Govind Rubber Ltd.
9. PTL Enterprises Ltd.
10. Falken Tyre India Pvt. Ltd.

10
GLOBALLY:

1. Bridgestone
2. Michelin
3. Goodyear
4. Pirelli
5. Apollo Tyres
6. MRF Tyres
7. Continental Tyres
8. Dunlop
9. Yokohoma
10. Hankook
PESTEL analysis of Industry :

When analysing durable consumer goods industry of India impact of political,

economical, social, and technological factors on the industry were observed. It is
helpful measure to observe changes and tends in the durable goods market. Brand
analysis of all the four factors is as follows:
Political Factors : The custom duty rate on tyres
The peak rate of Customs Duty on all nonagricultural products were
progressively reduced in the Union Budgets during the last few years, but in
the case of Natural Rubber the rate of 20% has remained unchanged for over
a decade. This has resulted in a serious anomaly of Customs Duty on raw-
material (Natural Rubber - 20%) being higher than the Customs Duty on
finished product (Tyres - 10%).
FICCI has also given the following recommendations for the tyre industry:

11
  FICCI would request for waiver of Customs Duty on all raw materials
not manufactured domestically.
 To overcome problem with respect to exports of tubes / flaps, it is
suggested to include 'Tyre Manufacturer' as a class of Exporters under Rule
20 of Central Excise Rules to allow them procure tubes and flaps without
payment of duty for exports
 Political stability and importance of Rubber & Plastics sector in the
country's economy.
 Risk of military invasion
 Level of corruption - especially levels of regulation in Consumer
Goods sector.
 Bureaucracy and interference in Rubber & Plastics industry by
government.
 Legal framework for contract enforcement
 Intellectual property protection
 Trade regulations & tariffs related to Consumer Goods
 Favored trading partners
 Anti-trust laws related to Rubber & Plastics
 Pricing regulations – Are there any pricing regulatory mechanism for
Consumer Goods
 Taxation - tax rates and incentives
 Wage legislation - minimum wage and overtime
 Work week regulations in Rubber & Plastics
 Mandatory employee benefits
 Industrial safety regulations in the Consumer Goods sector.
 Product labeling and other requirements in Rubber & Plastics

12
Economic Factors :
The Macro environment factors such as – inflation rate, savings rate, interest
rate, foreign exchange rate and economic cycle determine the aggregate
demand and aggregate investment in an economy.
While micro environment factors such as competition norms impact the
competitive advantage of the firm. The Rubber Company can use country’s
economic factor such as growth rate, inflation & industry’s economic
indicators such as Rubber & Plastics industry growth rate, consumer
spending etc to forecast the growth trajectory of not only --sectoryname--
sector but also that of the organization.
Economic factors that The tyre industry should consider while conducting
PESTEL analysis are -
 Type of economic system in countries of operation – what type of
economic system there is and how stable it is.
 Government intervention in the free market and related Consumer
Goods
 Exchange rates & stability of host country currency.
 Infrastructure quality in Rubber industry
 Comparative advantages of host country and Consumer Goods sector
in the particular country.
 Skill level of workforce in Rubber & Plastics industry.
 Education level in the economy
 Labor costs and productivity in the economy
 Business cycle stage (e.g. prosperity, recession, recovery)

13
  Economic growth rate
 Discretionary income
 Unemployment rate
 Inflation rate
 Interest rates

Social Factors
As the joint-family system crumbles and the number of nuclear families explode,
more small families seem to be demanding a two/four wheeler for themselves. This
has directly resulted in higher sales of tyres in the past decade.
Higher car density per family: The number of upper-class and upper-middle class
families is more than one car per family, seems to be increasing exponentially.
This is especially true in cities where working members of same family find it
difficult to survive without more than one car for transportation. With higher
disposable incomes, these families are finally able to afford this need.
 Shifting Savings to EMI culture: Another notable trend that seems to be
fueling car sales (and therefore tyre sales) is the shift in the middle-class
consumer saving habits. The Indian middleclass family has long been
known for its saving frenzy. But with a younger workforce, higher Page
| 7 disposable incomes, lower unemployment and the influence of
globalization, the average Indian middle-class family is slowly warming
up the idea of EMI and buying on credit. This has helped in furthering
the sales of passenger cars significantly.
 Rubber has helped the farmers to get a steady income, and they are able
to get good money for their produce almost throughout the year. The
best part about rubber is that it can yield almost throughout the year,
only except for a brief gap in summer and here in winter. If the
economic growth improves, then consumption of rubber will also go up.
Technological Factors
14
 The Indian tyre market has attracted global manufacturers on account of
encouraging growth figures. These manufacturers are expected to invest
huge amounts into the industry over the next few years, with a major
proportion of this investment directed towards the Truck & Bus (T&B)
radial tyre capacity expansion.
 several “Greenfield” plants are in pipeline to include new capacities.
The implementation of brown-field projects is executed to cater to the
growing demand. Greenfield units are expected to go on-stream in the
coming years, just by the time when there will be an urgent need to
bridge an increasing demand-supply gap in T&B radial tyre segment.
 Impact on cost structure in rubber industry
 Impact on value chain structure in consumer goods sector
 Rate of technological diffusion.

ENVIRONMENTAL FACTORS:
 Scrap tyres are about to become the latest headache for a government
still smarting from the debacle over its mountain. New ways will
have to be found to dispose the tyres that are stockpiled or put in
landfills every year. The problem is huge. The number of tyres in use
is forecast to increase by up to 60% by 2021, as the number of
vehicles rises. Every day, 100,000 are taken off cars, vans, trucks,
buses and bicycles. It is widely estimated that there are now more
than 200m lying around.
 By their very nature, tyres are difficult to dispose off. They are
designed not to fall apart while you're driving along the motorway, so
they are one of the more intractable issues. Although tyres remain
substantially intact for decades, some of their components can break
15
 down and leach. Environmental concern centers on the highly toxic
additives used in their manufacture, such as zinc, chromium, lead,
copper, cadmium and sulphur.
 The environment agency is launching a campaign later this month to
alert the public and industry to the need to prolong the life of existing
tyres and find new recycling methods. The best use of tyres is
probably to retread them, but this is now expensive, and fewer than
ever are recycled in this way. Around 48,500 tonnes are converted
into "crumb rubber", used in carpet underlay and to make surfaces
such as those on running tracks and children's playgrounds.
 More controversially, a further 18% are burnt as a "replacement fuel"
in the manufacture of cement. This is fast becoming the most popular
way of disposing of them, but it is of increasing concern to
environmentalists and scientists. Tyre burning emits ultra-fine
particles that have a toxicity all of their own. The toxicity is even
stronger if this contains metals such as nickel and tin, which you get
when you throw the whole tyre into the furnace. If the metal content
of the particles goes up, then there is going to be an increasing impact
on health.
 Before entering into the market or starting new business into the
existing market the firm should carefully evaluate the environmental
standards that are required to operate in those markets.
 Some of the environmental factors that a firm should consider
beforehand are as follows:
1. Waste management in consumer goods sector
2. Laws regulating environment pollution
3. Recycling
16
 4. Attitude towards “green” or ecological products
5. Climate change

LEGAL FACTORS :

 Law enforcement
 Tax policy
 Environment protection laws
 State owned industries
 Consumer protection and e-commerce
 Copyright, patents/ intellectual property
 Data protection and health and safety law

Michael Porter's Five Forces Model, a way to look at Indian Tyre Industry.
Michael E Porter's five forces model is any day a best tool to analyze any business
industry. So with this article I have tried to look at Indian Tyre Industry through
Porter's view.
1) Bargaining power of supplier
Bargaining power of suppliers can be segregated in two parts according to
the demand of industry.
Rubber :
There are two reasons behind this being low first one is most of the tyre
firms get150 days credit for buying the rubber from international market
which is not the case if they buy it from domestic rubber growers. And the
second reason is, this credit is being offered at LIBOR, which is the London
Inter-bank Offered Rate. It is the rate of interest at which banks borrow
funds from other banks.
Other Petro chemical based material (Carbon black, Nylon tyre cord etc.)
The power of suppliers is high in this category as India is limping back in
case of Petro based raw materials like carbon black and chemicals which
account low in quantity terms but are high cost generators. Also the price of

17
 NTC fluctuates in line with the prices of Caprolactam (a petroleum
derivative)-it¡¦s main raw material. The prices of these materials are beyond
control of tyre industry.

Bargaining power of buyers :

This can be seggeregated into two parts as follows.
 OEM’s :
The OEMs are always in strong position when the bargaining power of buyers
is concerned. The reason behind this is most of them are having contract with
their relative tyre manufacturer under which the prices of tyre remains stable
for this OEM irrespective of market price. The benefits are given to them as
they are buying in bulk and the relation gives the tyre firms something called
brand association.

 Replacement :

The scene in replacement segment is quite reverse as the bargaining power

for the replacement segment is moderate due to the fact that the buyers are
not that strong as compared to OEMs. The demand in buses and truck
segment is always high because of Indian poor road conditions apart from
this the purchase is made in small units.

3) Threat of substitute :

It is moderate or as the industry is facing opposition from retreading sector

all over the globe. This cheaper option, around 20-25% of the original tyre
cost, is present in developed countries since some decade back. And this is
heading towards strong position here in India too.

4) Threat of new entrants :

18
 The threat of new entrant is moderate or can be described as low because
the industry is highly capital intensive and the level of technological
expertise required is also highly specific. But if we see from domestic
(Indian) industry's point of view, this better can be defined as high. The
reason being, global tyre industry is already seeing mergers and acquisitions
in order to restructure. And as of now India and China going to be the hub of
activities as far as tyre industry is concerned due to low production cost as
well as other relevant benefits. So for any of the global big shot Indian
company will be a good option to go for.

5) Industry rivalry :

High, because gradually the overseas players are expanding their wings
over Indian tyre industry and also a limited and every player is moving
towards automated technology, like ERP and SCM. Apart from the
aforementioned reason, the industry is seeing high competitive scenario at
present because of various reasons like rising input costs, low realizations
from growing OEM segment where the vehicle manufacturers are not ready
to share the burden of tyre firms, the portion of replacement pie continuously
taken away by the retreading sector which is slowly but firmly rising its head
and that to in high realization segment of Bus-Truck tyres and last but not
the least the unorganized sector is always there to give head ache to these
established players like CEAT, JK, Apollo and MRF.

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CHAPTER III: COMPANY PROFILE
COMPOSITION OF BOARD
.

Table No.2: Organization Chart of continental tyres:

Name Designation

Dr. Elmar Degenhart Chief executive officer

Wolfgang schafar Chairman

Dr. Ariane Reinhart Member of executive board

Hans-Jürgen Duensing Member of executive board

Christian Kötz Member of executive board

Helmut Matschi Member of executive board

Nikolai Setzer Member of executive board

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MISSION, VISION AND VALUES OF THE COMPANY
Vision: Your Mobility. Your Freedom. Our Signature

› Highly developed, intelligent technologies for mobility, transport and

processing make up our world.

› We want to provide the best solutions for each of our customers in each of our
markets.

All of our stakeholders will thus come to recognize us as the most value-creating,
highly reliable and respected partner.

Mission:

We are conscientious people who help others around the world fulfill their dreams
of mobility. Mobility and transport are essential elements of our lives. We want to
play our part in meeting the high expectations related to this. As a responsible,
leading company and the partner of choice, we invent, develop, produce and market
indispensable and pioneering technological solutions.

Values :

Trust
Passion to Win
Freedom to Act
For One Another

SWOT ANALYSIS:

21
Strengths are defined as what each business does best in its gamut of operations
which can give it an upper hand over its competitors. The following are the strengths
of Continental:

 Focus on core values: From the time it was set up in the year 1871, the
company has also upheld the four values it believes in which are trust, passion
to win, freedom to act and for one another. These values have been imbibed
and integrate with every action that the company has taken since then and the
leader attribute their success to this.
 Corporate Culture: The culture of the company which trickles down from the
top management to the lowest level of employees is all about trust and freedom
and each individual is given ample opportunities to grow and excel in their
career and job roles. This culture has been able to create highly satisfied
employees who do need incentives to perform.
 Focus on customer needs: Continental Tires has always
developed products based on customer feedback and has a robust system for
collecting and implementing feedback.This has helped them to get a better hold
of market trends and incorporate them faster into products.
 Corporate Strategy: The corporate strategy of the brand is based on three
pillars which are their focal area for value addition
productivity, innovation and global growth. The company strategizes to
integrate these areas and look at building the sustainable competitive
advantage.
 Management Style: Quite unlike the German culture, Continental Tyres has
centralized yet decentralized management and decision making style. While
the framework is set in a centralized manner for taking each strategy
and planning is also centralized, the execution is handed over to each
individual and thus every employee of the company gets a chance to work in a
free environment.

WEAKNESSES :

Weaknesses are used to refer to areas where the business or the brand needs
improvement. Some of the key weaknesses of Continental Tyres are:

 High costs of service: The cost of service is high for Continental especially in
the case of light and heavy commercial vehicles. With increased focus on green

22
 option disposal and management of waste managing these tasks have become
high costs for the business.
 Low margins: In most of the tire segments like radial for heavy vehicles and
farm equipment the volumes are low and in the case of high volume segments
like tires for passenger cars the competition is high and this reduces the margins
significantly.
 Presence in too many geographies: Continental Tyres has operations in most
of the countries across the globe and the cost, as well as efforts of reaching out
to this huge market and the returns on investment from this, is reducing day by
day. Added to that is the reduction in market share because of multinational as
well as regional player s.

Opportunities refer to those avenues in the environment that surrounds the business
on which it can capitalize to increase its returns. Some of the opportunities include:

 High growth potential in India: As per latest research the biggest market for
tires will be Chine, India, and Brazil. Indian alone has roughly 60
manufacturers of tyres both big and small, many of which have presence only
in local markets. The tire market is predicted to have a CAGR around 9 % per
year between 2015 and 2021.
 Evolving Customer Needs: There is a greater demand for driving safety and
thus high grip tyres for cars and two-wheelers have huge future potential.
Customers are environmental savvy and there is also a demand for gree tire
options.

Threats to continental tyres:

Threats are those factors in the environment which can be detrimental to the
growth of the business. Some of the threats include:

 Competition: The company faces stiff competition from brands like JK

tyres, Apollo Tyres, MRF tyres, CEAT tyres, Dunlop, Bridgestone, Michelin,
Good year and Cooper Tires in India.
 Fluctuating costs: The cost of raw material for tires depend on oil prices since
many are oil-based derivative and the cost of service are also high as well as
fluctuating. This creates numerous pricing challenges.

23
  4p’s of marketing :

Product:
The product strategy and mix in Continental marketing strategy can be explained
as follows:
The Continental group is a diversified business entity, which manufactures
automobile tyres and other electronic components. The company primarily
involves in the following areas of production: Tyres, Interior, Powertrain, Chassis
and Safety, ContiTech
The company manufactures and sells tyres for cars, commercial vehicles and
bicycles under the Continental brand name. Apart from this, it has various regional
brands which are used to increase sales in concerned territories. This explains the
product strategy in the marketing mix of Continental tyres. Being a German
manufacturer, Continental becomes the most reliable choice of tyres to majority of
the automobile manufacturers in Germany. Daimler AG, Volvo, Volkswagen,
BMW, Porsche and Renault are some of the major customers for Continental in the
European market. Apart from these, renowned manufacturers like Toyota, Honda
and General Motors also use Continental tyres in their vehicles.
Apart from tyres, Continental offers various types of infotainment and safety
systems which are supplied to commercial vehicle manufacturers. Driver
information systems, Intelligent Braking Systems, Body Security components and
Connectivity devices are also manufactured by Continental based on requirements
from regional clients. Recently, Continental has also entered manufacture of low-
cost, high fuel-efficient components, keeping in mind the changing market trends.

Price:
Below is the pricing strategy in Continental marketing strategy:
Continental is considered a premium product with high quality standards across the
globe. Studying the price for Continental marketing mix needs to be analysed from
a global perspective & understanding the product range. Owing to this, the
company offers its products at a slight premium as compared to other
manufacturers. Surprisingly, manufacturing facilities have been limited to a few
places over the world. This indicates that Continental is projecting the image of
being a premium product.
Overall pricing of the components is aimed at only business customers. Individual
selling of products is minimum, which is quite evident from the pricing. Interior

24
components follow a more competitive pricing as these are of higher demand in
emerging markets for Continental. Manufacturers in countries like India, China
and South American countries have widely accepted these components and
therefore the company looks to promote the products in these areas with revised
pricing strategies.
Place:
Following is the distribution strategy of Continental:
The company clearly offers a difference in the products offered. Although tyres
have been the area of primary focus, Continental has also started investing in the
interior components business. Manufacturing facilities for tyres were earlier
concentrated only to certain cities across the globe. However, owing to the recent
trends in sales of various products, Continental has setup research and
manufacturing facilities across different parts of the world. Countries like India,
Singapore and China have also become manufacturing bases for the company.
In-line with many of the major manufacturing companies of the world, Continental
has also entered upcoming markets in Asia, Africa and South America. Each of
these parts of the world have multiple manufacturing units, which cater to specific
individual demands. Continental looks to push sales of interior components based
on these revised strategies, which have attracted heavy investments.
Hence, the place strategy in the marketing mix of Continent covers manufacturing
places and the extensive global distribution network.
Promotion:
The promotional and advertising strategy in the Continental marketing strategy is
as follows:
Continental AG has been a significant player in the segment of automotive
components and parts. Like many other vehicle manufacturers, Continental directly
engages in promotional events like rally racing and other track events. Along with
many of its renowned clients, Continental co-sponsor events around the world. The
promotional strategy in marketing mix of Continental focuses on 360 branding and
uses print, TV, online ads, billboards etc to create brand awareness.
Electronic components have become more popular in the industrial markets
because of the reliability and quality on offer. Continental AG enjoys a strong level
of connect with reputed manufacturers, which make the promotions of their
products less essential. The company relies on essential parameters like quality,
reliability and values. Hence, this completes the Continental marketing mix.

25
Product Range of Continental tyres :
 SportContact 6
 ContiSportContact™ 5P / SUV
 ContiSportContact™ 5 / SUV
 ContiPremiumContact™ 5
 ContiPremiumContact™ 2
 ContiEcoContact™ 5
 ContiEcoContact™ 3
 Conti.eContact™
 WinterContact™ TS 850 P / SUV
 ContiWinterContact™ TS 850
 ContiWinterContact™ TS 800
 ContiWinterContact™ TS 830 P
 ContiWinterContact™ TS 810 Sport
 CrossContact™ UHP
 ContiCrossContact™ LX 2
 ContiCrossContact™ LX
 ContiCrossContact™ LX sport
 4x4Contact™
 ContiCrossContact™ AT
 ContiCrossContact™ Winter
 Conti4x4WinterContact™
 ContiSeal
 ContiSilent

26
MARKET SEGMENTATION :
Continental Tire has developed product lines for different customer segments –
Goods, People and Construction. Our tires are tailor-made for the specific
conditions faced by these different sectors of the transportation industry.
Goods :
No two roads are the same and no two consignments are the same, which is why
we developed Continental Truck Tires to be the ideal solution to specific transport
requirements, and to substantially increase the overall efficiency of your
customers’ fleets.
People :
While the demands made on Bus Tires vary substantially depending on the
individual application, the demands of the passengers remain the same – they want
to travel in comfort and they expect maximum safety.
Construction :
Continental Truck Tires for the Construction trade offer the greatest flexibility in
all circumstances – with the performance needed to handle maximum strain under
tough loading conditions, providing optimum traction even in harsh off-road
conditions. So, regardless of the terrain, your customers make good ground.
APPLICATIONS :
Whether your customers are on a cross-country commission, driving across town
for a delivery, or off-road at a construction site, we deliver the tires to match their
specific vehicle application performance needs. And choosing the right tire is
critical to your business. But it’s easy when you know how.

27
Long Haul Tyres :
Long haul highway trucks generally carry one load for long distances, driving at
higher speeds. These carriers make few stops in the course of their trips. These
vehicles are typically driven in an operating radius of 300-plus miles and accumulate
mileage in excess of 80,000 miles per year. Long haul tires typically experience low
abrasion and deliver long original tread mileage. You will find that Continental’s
line of Long Haul tires delivers:
• Lower fuel consumption
• High mileage performance
• And a comfortable ride
Regional Traffic :
Medium haul trucks often make multiple deliveries and typically carry less than a
truckload. These vehicles generally drive highways and secondary routes with an
operating radius of 300 miles or less. On average, these trucks accumulate 30,000 to
80,000 miles per year. Medium haul truck tires typically experience medium
abrasion and lateral scrub from twisting and turning. Continental’s line of Regional
tires are engineered for:
• Maximum mileage
• Exceptional durability
• Excellent road grip
Urban Traffic :
Delivery, or local haul trucks, operate in metropolitan areas where they are exposed
to constant starting and stopping of city traffic. These trucks are usually driving
within city limits, accumulating yearly mileage of 30,000 or less.The more a vehicle
stops and starts, and twists and turns through traffic, the more the potential for high-
scrub wear to the tires due to curb damage and road hazards. Continental Urban Tires
are built to deliver:
28
• Resistance to curb impact
• High mileage
• And excellent traction
Construction :
Construction tires operate in some of the most demanding environments.
Continental Tire’s Construction tires are designed for:
• High mileage on road
• And durability off road
These vehicles often work within 100-mile radius and typically accumulate
anywhere from 10,000 to 70,000 miles per year. Due to the harsh environments these
vehicles operate in, these tires are more prone to punctures and abrasion.
Off-Road :
Medium and short haul or mixed-service vehicles are often used in the logging and
waste management trades -- so they are built to drive both on-highway and off-
road. These vehicles also tend to work within a 100-mile radius and can accumulate
anywhere from 10,000 to 70,000 miles per year.
Because of the harsh environment these vehicles typically operate in, these tires
are subject to abrasion, punctures, and sidewall damage. Continental Off-Road
Tires are engineered for:
• Outstanding durability
• Excellent casing protection
• And traction on all types of terrain.
No matter where your customers operate their trucks, they can count on
Continental Truck Tires for traction, durability, ride comfort, and impressive fuel
economy they can depend on Continental to deliver the “Lowest Overall Driving
Costs

29
Major achievements :
Market share :

30
New product launches :
 Continental Is Developing New Tyres For EVs And Fuel Efficiency Norms, Launch
In 2021.
 Continental building new motorcycle tyre factory in Rayong, Thailand.
› In the course of the next few years, the company plans to invest
approximately EUR 26 million here. When the plant comes on stream
in 2021, production will initially focus on radial tires, followed at a later
stage by bias-ply/cross-ply models. In all, the factory will create
approximately 100 new jobs.The ongoing dynamic demand for
Continental motorcycle tires in Europe, the USA and the growth
markets of Asia and South America is driving this significant expansion
in production capacity.
 Two new continental tyre types, specially developed for off road racing series
Extreme E, made their global debut at goodwood festival of speed.
› The cutting-edge technology, and the tyre design that Continental has
developed has resulted in a stunning car capable of the highest

31
 performance in the toughest and most varied environments on the
planet.

 Continental has started production of the new Van Contact™ Eco, which
offers impressively high mileage, delivers precise handling and short braking
distances on wet and dry roads.
 Continental launched its new radial port tyre portfolio at the 2019 TOC Europe
expo in Rotterdam.
 The new radial tyres – the ContiRT20, the Container Master Radial and the
Straddle Master Radial – improve mileage and endurance for load and carry
applications. The tyres offer low heat generation and a flat tread contour, ensuring
a high level of endurance and mileage over long distances.
 Continental Tire is launching two new all-season light truck tires: the
TerrainContactTM H/T and the CrossContactTM LX25.
› The TerrainContactTM H/T is Continental Tire’s all-new premium
highway terrain all-season tire for pickup trucks and full-size SUVs.
A strong, durable, and quiet tire, the TerrainContactTM H/T features
Continental Tire’s patented TractionPlusTM Technology with a focus
on exceptional tread life and robust durability while providing best-in-
class wet braking.
 Continental has introduced its all-new Generation 6 tyre range, which has
been specifically designed for the Middle East market.The Generation 6
tyres comprise ComfortContact 6 for smaller cars and city driving,
UltraContact 6 for larger sedans and MaxContact 6 for high-performance
vehicles.
 Continental Tire Launches PureContact LS and TrueContact Tour.Key
features of PureContact LS include :
› 10% improvement in Wet Traction and 23% improvement in wear
over the PureContact - EcoPlus Technology enhances wet grip, and
improves treadwear and fuel efficiency over the life of the tire.
› A 50% reduction in noise over the PureContact.
› Traction Grooves specifically designed for snow performance.
Quick View Indicators:
o Tuned Performance Indicators enable the driver to see when the tire
is no longer performing optimally in Dry, Wet or Snow conditions.

32
 o Alignment Verification System shows the driver when it’s time for an
alignment
 Key Features of the TrueContact Tour include:
› 27% longer wear over the TrueContact
› Greater fuel economy
› Continental’s Comfort Ride Technology reduces road vibrations
› Traction Grooves to improve snow performance
Quick View Indicators:
› Tuned Performance Indicators enable the driver to see when the tire
is no longer performing optimally in Dry, Wet or Snow conditions
› Alignment Verification System shows the driver when it’s time for an
alignment
 Continental launches bike tyre made from sustainable dandelion rubber.
 Continental launches Digital Tyre monitoring platform ContiConnect.
› The system helps fleets to maximize their efficiency and sends alerts
if tire pressure deviates from the defined value. By providing this
information the fleet benefits from a reduced number of breakdowns,
lowers maintenance costs, and generates value by increasing the
vehicle’s uptime.

Awards and achievements:

 Highly rated by the British public in the latest annual ranking of the UK’s
strongest consumer brands.
 Continental has taken top honours in the Auto Express Product awards,
claiming ‘Product of the Year’ alongside a hat trick for their summer, winter
and all-season tyre.
 Continental has scooped top spots in the Auto Express tyre awards 2017 for
both its summer and winter products. The Continental ContiPremiumContact
5, and the WinterContact TS 860, both successfully took first place.
› The awards continue to highlight exceptional performance, quality,
safety, desirability and value. They are seen within the motoring
industry as a stamp of approval that offers motoring enthusiasts
confidence when looking for their next tyre purchase.

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  Technology tie-up and Innovation :
 Two new Continental tyre types, specially developed for the off-road racing
series Extreme E, have made their debut in the Middle East.
 The unveiling of these cutting-edge products follows the announcement
earlier this year of Continental’s partnership with the electric racing series.
 The new tyres, with summer and winter tyre technology and designed for the
world’s toughest driving conditions, were presented to the public at the
Goodwood Festival of Speed along with the unique electric sports utility
vehicle.
 Together, driver, car and tyres will tackle some of the most extreme
locations across the globe, from the Himalayas and the Arctic to the Indian
Ocean and deserts.
 All Extreme E teams must use the same set of standardised equipment,
created and assembled by motorsport manufacturer Spark Racing
Technology.

Digitalization : PEMA and continental optimize tyre management for entire

fleet.

 Commercial vehicle rental company PEMA, which operates in many

European countries, and Continental – technology company and
manufacturer of premium tires – have digitalized tire management for
more than 18,000 vehicles.
 CESAR – a digital fleet administration system developed by Continental
– was integrated in PEMA’s system landscape back in 2018 and allows
vehicle- and service-relevant data to be continuously exchanged and
updated via a special interface.

34
 E-mobility: Continental launches first tire optimized for electric buses
in city traffic :
 Tires for electric buses need to support a usually high overall vehicle
weight due to the heavy electric battery and stand instant torque
delivery. To master these challenges, they need to combine grip,
robustness, and above-average load carrying capacity.
 Continental, meets this new need with its new Conti Urban HA3
315/60 R22.5 154/148J (156/150F) tires. These all-axle tires for the
safe electric passenger service feature superb grip and a load carrying
capacity of eight tons per axle, 0.5 tons more than the standard for this
tire size.

 Continental presents ContiConnect™ Live at IAA Commercial

Vehicles:
 ContiConnect Live, available from the second quarter of 2019,
informs operators of truck and bus fleets immediately if there is a
problem with the temperature or pressure of a tire, even when the
vehicle is on the road.
 The data is transferred to the servers and the web portal by the
ContiConnect™ Driver app, which is also new. Before the end of this
year, the app will be able to show tire information on Daimler
Fleetboard and TomTom Telematics devices as well as other Android
devices, such as smartphones and tablets, initially in the driver’s cab.

35
 The SSR tyres from Continental – advanced runflat technology :
 Continental’s SSR tyres use reinforced sidewalls to support the
vehicle in the event of a loss of air pressure. SSR technology prevents
the side of the flat tyre from being crushed between the road and
wheel rim.
 Reduced danger and hassle.
 Drive to safety for up to 80 km (50 miles) of 80 km/h (50 mph).
 Compatible with standard wheel rims (H 2)
 No need for a spare wheel and jack
 As SSR tyres offer a very high standard of driving comfort, the driver
will barely notice any loss of pressure in the tyre. For this reason,
Continental SSR tyres may only be used on vehicles equipped with a
tyre pressure monitoring system, which will display the drop in tyre
pressure on the dashbord instrument panel.

 ContiSilent is a tire noise-reducing technology

developed by Continental.
 Reduced interior noise on all road surface.
 ContiSilent™ functions in all weather conditions.
 No change in any other driving performance characteristic.
 No negative influence on mileage and load/speed capability.
 Same mounting and storage as for standard tires
 ContiSilent™ helps reduce interior vehicle noise up to 9 dB(A),
depending on the type of vehicle, its speed and the road surface.
 At the moment it is only available for summer tires and is
compatible with all commonly available rims. Driving performance
is not affected and there is no negative influence on mileage and
load/speed capability. Fitting on four positions is recommended.

36
 Corporate social Responsibility :

 Operating globally also entails taking on social responsibility on a

global level. By being committed to social responsibility, we are
making a positive contribution to society while also creating value for
our company. Our activities focus on social welfare, road safety,
education, science and sports. The following are a few examples.
 We take on social responsibility mostly on a decentralized basis.
Charitable projects, activities and donations are often initiated and
organized by dedicated employees and supported by the company.
 In particular emergency situations, Continental provides central
support with national projects and challenges, or offers assistance in
dealing with international humanitarian emergencies. In doing so, the
corporation as a whole fulfills its social responsibility.
 Support in international disasters :
In September 2017, we supported the disaster relief in Texas, U.S.A.,
after the historic flooding caused by Hurricane Harvey. The donation,
which went to the American Red Cross, consisted of an amount
donated directly by Continental and an amount matching donations
from employees. In addition to the company’s financial assistance, the
employees at local sites became actively involved in the relief effort
in Houston and other areas of southern Texas.
 In October 2017, we supported the disaster relief in the areas of
Mexico affected by the earthquake. In addition, we called on our
employees in North America to donate money to the earthquake
victims and we doubled the donated amount. In order to help the
earthquake victims directly, our team in Mexico collected donations
of food, household items and other necessities.
 Local involvement
Continental supports charitable initiatives with financial donations
both large and small, with donations of goods, and with active
involvement. In this context, our employees show their strong social
commitment as good neighbors locally.
 Continental’s employees in Stöcken, Hanover, donated all the
proceeds from their summer festival to an organization that takes care
of children with burn injuries and their families. The initiative offers
advice to affected families after burning and scalding accidents
involving babies and children. Its main activities include advice and

37
 providing contacts during the hospital stay, assistance during
rehabilitation and afterwards, and preventive measures.
 In Thailand, many young people drive and are therefore exposed to
the hazards of the road. Road safety is a particular concern for
Continental. For four years, Continental employees have therefore
been providing safety training for young drivers in cooperation with
the Rayong highway police. Selected employees and members of the
Thai highway police put on workshops to give students detailed
information on what to look out for on the road. For example, how to
protect themselves and others from hazards, what distinguishes a safe
vehicle and the importance of wearing a helmet on mopeds and
motorcycles.
 Creating opportunities for refugees
Integrating people of different origins and cultural backgrounds is an
important part of our corporate culture. For over a year, we have been
working with the German Federal Employment Agency on a new,
specially developed program that makes it easier for refugees to enter
the job market. In this program, Continental offers refugees a work
placement of up to 12 months.
 This allows the participants – while receiving the standard
remuneration for the first year of an apprenticeship – to obtain the
qualification needed for an apprenticeship. Once completed, they have
the chance to begin a company apprenticeship at Continental.
 Supporting young jobseekers and inspiring love for Europe
Under the umbrella of the “Experiencing Europe” initiative,
Continental has launched a program especially for young people.
Together with the German Federal Employment Agency, we offer
jobseekers aged between 18 and 25 short internships at company
locations throughout the rest of Europe. The program is open to young
adults with no professional experience or qualifications. The project is
an initiative throughout all of Germany.
 The aim is to help young people access the rest of Europe and thus
strengthen the spirit of European community. We also see the project
as an opportunity to discover potential employees and talented young
people.
 The pilot project for the initiative was launched at Continental in June
2017. Under the name “We l.o.v.e. Europe,” the first participants
started foreign internships at Continental locations in Belgium,
France, Hungary, Italy, Portugal, Romania and the United Kingdom.

38
In the meantime, further companies have joined the “Experiencing
Europe” initiative to give even more young adults the opportunity to
gather professional experience in Europe.

39
  4p’s of marketing :

Product:
The product strategy and mix in Continental marketing strategy can be explained as follows:
The Continental group is a diversified business entity, which manufactures automobile tyres and
other electronic components. The company primarily involves in the following areas of production:
Tyres, Interior, Powertrain, Chassis and Safety, ContiTech
The company manufactures and sells tyres for cars, commercial vehicles and bicycles under the
Continental brand name. Apart from this, it has various regional brands which are used to increase
sales in concerned territories. This explains the product strategy in the marketing mix of Continental
tyres. Being a German manufacturer, Continental becomes the most reliable choice of tyres to
majority of the automobile manufacturers in Germany. Daimler AG, Volvo, Volkswagen, BMW,
Porsche and Renault are some of the major customers for Continental in the European market. Apart
from these, renowned manufacturers like Toyota, Honda and General Motors also use Continental
tyres in their vehicles.
Apart from tyres, Continental offers various types of infotainment and safety systems which are
supplied to commercial vehicle manufacturers. Driver information systems, Intelligent Braking
Systems, Body Security components and Connectivity devices are also manufactured by Continental
based on requirements from regional clients. Recently, Continental has also entered manufacture of
low-cost, high fuel-efficient components, keeping in mind the changing market trends.

Price:
Below is the pricing strategy in Continental marketing strategy:
Continental is considered a premium product with high quality standards across the globe.
Studying the price for Continental marketing mix needs to be analysed from a global perspective
& understanding the product range. Owing to this, the company offers its products at a slight
premium as compared to other manufacturers. Surprisingly, manufacturing facilities have been
limited to a few places over the world. This indicates that Continental is projecting the image of
being a premium product.
Overall pricing of the components is aimed at only business customers. Individual selling of
products is minimum, which is quite evident from the pricing. Interior components follow a more
competitive pricing as these are of higher demand in emerging markets for
Continental. Manufacturers in countries like India, China and South American countries have
widely accepted these components and therefore the company looks to promote the products in
these areas with revised pricing strategies.

Place:
Following is the distribution strategy of Continental:
The company clearly offers a difference in the products offered. Although tyres have been the area of
primary focus, Continental has also started investing in the interior components business.
Manufacturing facilities for tyres were earlier concentrated only to certain cities across the globe.
However, owing to the recent trends in sales of various products, Continental has setup research and

40
manufacturing facilities across different parts of the world. Countries like India, Singapore and China
have also become manufacturing bases for the company.
In-line with many of the major manufacturing companies of the world, Continental has also entered
upcoming markets in Asia, Africa and South America. Each of these parts of the world have multiple
manufacturing units, which cater to specific individual demands. Continental looks to push sales of
interior components based on these revised strategies, which have attracted heavy investments.
Hence, the place strategy in the marketing mix of Continent covers manufacturing places and the
extensive global distribution network.

Promotion:
The promotional and advertising strategy in the Continental marketing strategy is as follows:
Continental AG has been a significant player in the segment of automotive components and
parts. Like many other vehicle manufacturers, Continental directly engages in promotional
events like rally racing and other track events. Along with many of its renowned clients,
Continental co-sponsor events around the world. The promotional strategy in marketing mix of
Continental focuses on 360 branding and uses print, TV, online ads, billboards etc to create
brand awareness.
Electronic components have become more popular in the industrial markets because of the
reliability and quality on offer. Continental AG enjoys a strong level of connect with reputed
manufacturers, which make the promotions of their products less essential. The company relies
on essential parameters like quality, reliability and values. Hence, this completes the Continental
marketing mix.

41