SHANGHAI, Jan 23 (Reuters) - German car tyre and components companyAG aims to increase Asian sales at its automotive systems unit CAS by at least 10 percent a year from 2006, a senior executive said on Monday.
As part of its plans to supply the Chinese market, the company will invest around $300 million over the next 18 months in building a tyre factory in China.
"We see very significant growth. For us the potential is definitely to grow in the two-digit percentage region," Karl-Thomas Neumann, president of CAS, told Reuters in an interview on the sidelines of a news briefing.
The CAS division, which accounts for almost 40 percent of group sales, should double revenue from Asia to 1 billion euros ($1.22 billion) by 2010, the company had said earlier.
, the world's fourth largest tyre maker, is looking to Asian growth, which it expects to outpace global automotive market growth of about 4 percent, to compensate for stagnant sales in Europe and the U.S.
Its loss-making U.S. passenger car tyre business has suffered as major customersand cut production.
"We have done some major efforts to increase our position there. We are confident we can turn it around," Neumann said, referring to the U.S. tyre business.
Continental, which aims to invest more than 900 million euros globally in 2006, also plans further investments in China by the CAS unit.
"On the automotive systems side I think you can expect to see a few hundred million of investment to come in the following years," Neumann said.
"If it is according to our plan to double sales, then we need more production capability in this country."
Continental had earlier sought to form a joint venture with Chinese tyremaker Doublestar to enter into the local tyre market, but dropped that plan early in March after failing to gain majority control of the venture. ($1=.8232 Euro)