The former Juventus boss has brought Luiz back to Stamford Bridge two years after he was sold to Paris Saint Germain (PSG) in a world record £50 million deal for a defender.
But Conte's £32 million swoop for the centre-back on last month's transfer deadline day wasn't greeted with widespread acclaim given Luiz's habit of making careless and costly mistakes during his first spell with the Blues.
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Former Manchester United defender Gary Neville memorably said Luiz looked like he was "being controlled by a 10-year-old in the crowd on a Playstation" after one especially error-strewn display and he was unable to shed that reputation during his time in France.
Conte conceded the 29-year-old still has room for improvement, but the Italian believes Luiz has the ability and desire to eventually rank among the best in the world. "I think every player can improve until the end of their career. I know this from my experience as a player," Conte told reporters on Friday. "Luiz is 29, it is a fantastic age for him to become one of the best defenders in the world.
"He wanted to play for Chelsea. It is a great opportunity for him and us. He has good characteristics to become a fantastic defender."
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The former Italy boss played a major role in transforming Leonardo Bonucci and Giorgio Chiellini into world-class defenders and, despite only working with Luiz for a few days, he already sees signs the centre-back can follow the same path of enlightenment. "We took a player with great personality and a good technique," he said. "David can improve in defensive situations, but he is a good guy, a positive guy for the changing room.
"I think also the coach must improve his players. This is important for me. To work on the weakness and make the player stronger. I'm very happy because I'm seeing great attitude and the will to improve, to have more knowledge."
Chelsea made bids for several other defenders before signing Luiz, yet the 47-year-old insisted it wasn't a panic move to bring in the former Benfica star. "When we take the decision about the players, we always take it together, me and the club," he added. "I told you this transfer market was very difficult to reach our targets but at the last minute there was this situation for the club to improve the squad. For this reason we bought Luiz."
Conte was also quick to play down suggestions Luiz could be used in midfield, a role he sometimes filled for PSG. "I must be honest, we bought Luiz because we need a centre-back," Conte added.
However, with John Terry and Gary Cahill entrenched as Chelsea's centre-backs and the defence functioning well as a unit, Luiz and fellow new recruit Marcos Alonso, a left-back signed from Fiorentina, may have to wait for their first appearances. "I think the new players needed a bit of time to work with a new philosophy," the Chelsea boss said ahead of Sunday's trip to Swansea. "For this reason I think the chance to play at the start is not high."
Chelsea's bid to maintain their 100 percent record under Conte will be overshadowed by Saturday's Manchester derby between United and City.
Conte will watch the showdown between two of Chelsea's main title rivals, but he refused to say who he regards as the greater threat. "I don't like to speak about the favourite because last season showed us that a team not favourite can win the title," he said. "We know United and City are two great teams. They reinforced a lot in this transfer market.
"But I think and I hope at the end of the season five or six teams can fight for the title."
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