FRANKFURT (dpa-AFX) - Continental CEO Nikolai Setzer is counting on attractive margins even with sustainable tires, which are more expensive to produce. He does not expect a dilution of margins to be associated with more environmentally friendly tires, the manager said at a press conference in Frankfurt on Wednesday. The manager also pointed to existing challenges such as supply chain problems in connection with new requirements for modern tires, which result in higher costs. Fair prices are therefore needed for modern tires, he demanded.

While Conti's automotive supplier business had been in the red operationally over the past two years, not least due to parts shortages and China lockdowns, the tire division had been robust and compensated for the other division's earnings weakness with a higher margin.

Conti now plans to launch a new tire in July. With a share of up to 65 percent sustainable materials, it will be the most climate-friendly tire produced for series production in the portfolio to date, Conti announced.

After the difficult past few years, however, the automotive industry is now facing new problems: Many groups are sitting on high inventories because demand has fallen. Inflation means that people are often more likely to forego expensive purchases such as a new car.

However, Conti CEO Setzer expects to be able to continue doing good business in the industry despite the lower sales prospects. He does not expect a slump in demand. The products offered by Conti are to a certain extent decoupled from the sheer production figures, Setzer said. The company, like other suppliers, expects automakers to install more and more advanced electronics in vehicles.

On Tuesday, the Hanover-based company had confirmed its medium-term targets at an investor event. According to these, the Group aims to achieve an operating margin (adjusted EBIT) of eight to eleven percent across all business areas in the medium term. A strategic outlook is to be presented at a capital market day during the winter season, which runs from October to Easter./lew/men/ngu