German automotive supplier acquires Modi Tyres

Continental AG, the German automotive supplier, has acquired 100% shareholding of Modi Tyres Co Ltd, a subsidiary of Modi Rubber Ltd.

Continental had announced the €18.5 million deal deal in April, which has been now completed after receiving the regulatory clearances.

The company has been renamed as Continental Tyres India Ltd.
 “The new entity will focus on local production and distribution of bias and radial truck and bus tyres as well as radial passenger car tyres for the Indian market,” the company said.

It is understood that the deal got delayed due to labour issues at Modi Tyres plant in Uttar Pradesh.

According to an analyst with a domestic brokerage firm, “Continental is not new to the Indian market. With competition being so severe, a lot depends on the kind of strategy the company adopts. The company will have to face major competition from players such as JK Tyre, MRF, Ceat, Michelin, and Apollo Tyres, which are investing around Rs12,000 crore put together.”