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German Tire Maker to Invest in Autobytel Units

November 30, 2000|Bloomberg News

Continental, the world's fourth-largest tire maker, said it will invest in European units of Autobytel.com Inc., an Internet car seller based in Irvine, expanding Continental's sales network and giving Autobytel cash to grow. The German firm will invest about $15 million in Autobytel's European holding company and take 20% to 25% equity stakes in its operations in Sweden, Germany and Belgium. It won't take a stake in the parent company, shares of which have declined 81% this year. Continental, based in Hanover, Germany, is cooperating with Autobytel as it seeks additional ways to reach potential buyers. The company expects half of all replacement tires in Europe to be ordered via the Internet by 2005; online sales account for 20% now. Autobytel Chief Executive Mark Lorimer said the company had $90 million in cash at the end of September and is spending $5 million to $7 million a quarter. He expects it to become profitable in its third quarter in 2001. Autobytel, which has operations in Sweden and Britain, will use Continental's investment to move into the Netherlands, Spain and France. Its shares fell 28 cents, or 9%, to close at $2.88 on Nasdaq.

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