Continental AG to expand in China

SHANGHAI - July 20, 2007: Continental AG has announced that intends to continue its expansion in China. The company, a subsidiary of the German automotive supplier Continental AG, made this clear during an interview with Gasgoo.com.

"The Chinese market plays a key role in our corporate strategy. The rising employee headcount and increased investments amply demonstrate that," notes Jun Sheng Liu, China representative of ContiTech AG. "Investing in China today is a little different from years ago. Auto enterprises in China have more choices when choosing a joint venture partner now than before. To ensure that our products and technologies maintain their leading positing in their respective market segment, ContiTech may either take advantage of a JV or establish a solely owned enterprise in the China.

In China, ContiTech manufactures components and systems for the automotive industry, machinery and equipment engineering, mining, the rail transport industry and the printing industry. Currently the operating profit of the company in China only amounts to EUR70 to EUR80 millions, still a small amount compared with its EUR3 billions worldwide.

Liu said ContiTech looks to further expand in China and may resort to mergers if necessary, "But above all we will boost our procurement from the existing EUR3,000 to EUR5,000 and export them to ContiTech's global operations," added Liu.

ContiTech has a total of seven operations worldwide, including ContiTech Fluid Technology, ContiTech Conveyor Belt Group, Benecke Kaliko AG, ContiTech Power Transmission Group, ContiTech Air Spring Systems, ContiTech Vibration Control and ContiTech Elastomer Coatings. In 2006 the sales volume of the group was EUR2.87 billion.

Currently ContiTech has a workforce of 1000 in the seven plants across China and they account for approximately 5% of our worldwide workforce of 22,000. ContiTech has been working closely together with Chinese enterprises on a partnership basis since 1996. The Fluid Technology unit has facilities in Changchun (ContiTech Grand Ocean) and Shanghai (ContiTech Fluid Shanghai Co., Ltd.) producing hose lines for Volkswagen and other big manufacturers. In Shanghai, ContiTech has a blanket printing facility (ContiTech Printing Blanket Shanghai Ltd.) as well as a representative office. ContiTech-Jiebao Power Transmission Systems Ltd., a joint venture which makes drive belts, spring strut bearings and gaiter seals, has a site in Ninghai. A new plant is set up at Zhangjiagang built by ContiTech Company Benecke-Kaliko AG together with Changshun.

For additional information about China’s burgeoning automotive market please visit http://www.gasgoo.com/Autobiz/list/7/China-News.html