Continental Tires India plans to increase its presence in India's premium passenger vehicle segment by manufacturing tyres of up to 23 inches locally, as the German tyre manufacturer responds to rising SUV sales and growing demand for replacement passenger car radial (PCR) tyres, the company's top executive told media sources.

Nevin Aslan-Ozkan, who assumed the role of Managing Director of Continental Tires India in April this year, said the company will continue to focus exclusively on the replacement market while expanding its manufacturing capabilities, technology portfolio and retail presence. Continental is implementing its EUR 10.5 million (US$ 12 million) investment programme, announced last year, to upgrade its Modipuram plant in Uttar Pradesh. The project will expand the factory's manufacturing range from 13-20-inch tyres to 23-inch tyres and is expected to be completed by the middle of next year.

"Nearly 60% of new passenger vehicles entering the market today are SUVs or 4x4s, and they require a different set of tyres," Aslan-Ozkan said. She added that the company aims to introduce German technology tailored to the requirements of Indian customers.

In addition to installing specialised machinery and tooling for larger-diameter tyres, the investment will expand local manufacturing capabilities for products that are currently imported or unavailable in India.

Replacement market remains the focus

Unlike several tyre manufacturers that operate both OEM and aftermarket businesses, Continental India remains focused exclusively on the passenger vehicle replacement market. According to Aslan-Ozkan, India's replacement PCR market currently stands at approximately 32-33 million tyres annually and is expected to grow by around 6% over the coming years. The premium segment, however, is expected to grow at a faster rate than the overall market.

"Anything above 17 inches is expected to witness double-digit growth over the next five years. For 18-inch-and-above tyres, we see growth of around 20%. While it is still a relatively small portion of the market, the shift towards SUVs and premium vehicles is accelerating demand," she said.

The strategy follows Continental's decision last year to exit the truck and bus radial (TBR) business in India and focus entirely on passenger light vehicle tyres. The company has no immediate plans to enter OEM supply, although Aslan-Ozkan said the opportunity continues to be evaluated as part of its long-term strategy.

Technology and product strategy

Aslan-Ozkan said that India's changing vehicle mix is also influencing consumer behaviour. Replacement tyres, traditionally viewed as a price-sensitive purchase, are increasingly becoming a value-driven decision as buyers place greater emphasis on safety, comfort and performance.

"People are moving away from a cost-conscious mindset towards a value mindset," she said. "Consumers are becoming more aware of the importance of tyres in terms of safety, comfort and performance."

Unlike domestic tyre manufacturers that account for a larger share of the replacement market by volume, Continental does not intend to compete primarily on price. "Our focus is not necessarily on volume. That will come naturally over time. The real differentiation is technology," Aslan-Ozkan said.

The company recently added the CrossContact AT2 all-terrain tyre for SUV owners to its product portfolio. India was among the first Asia-Pacific markets where the product was introduced, and it is manufactured at the Modipuram facility.

Retail network and digital operations

Continental currently operates more than 200 Conti-branded retail outlets across India and plans to expand the network further. According to the company, the emphasis will remain on strengthening partnerships and improving market coverage in cities with growing premium vehicle populations.

"We want to build trusted business partners who understand the positioning of our products rather than simply adding outlets for the sake of numbers," Aslan-Ozkan said.

Alongside its physical expansion, Continental is digitising its operations. The company already provides dealers with digital inventory visibility, online warranty claim processing and tyre traceability across the supply chain. AI-enabled image-based inspection tools also assist with customer complaint resolution by allowing preliminary assessments through photographs before physical inspections.

On the sustainability front, Aslan-Ozkan said Continental's Modipuram plant has eliminated coal usage in favour of biomass-based energy while also deploying solar power generation. Globally, the company continues to invest in reducing material consumption, increasing recycled content and improving manufacturing efficiency while complying with India's Extended Producer Responsibility (EPR) framework for tyre recycling.