Continental Automotive Systems to Build an Engineering Center in Shanghai, China

Asia Headquarters office to move to the new location in 2009

SHANGHAI, China, July 10 -- The Automotive Systems Division of the international automotive supplier Continental AG has announced plans to build a dedicated Engineering Center in Shanghai, China. As outlined during the signing ceremony held in Shanghai today, the new Engineering Center will be composed of two facilities: one office site with design and test labs in Yangpu District of Shanghai and the other one with large-scale equipment for bench testing as an extension of the existing Continental Automotive Systems Shanghai facility in Jiading. Both facilities -- representing a total capital investment of euro 48 million -- will be fully operational at the beginning of 2009 and provide employment for about 450 people with the potential to increase up to 600 by 2011.

The new Engineering Center in Shanghai will be one more milestone of the growth of Continental in China with the aim to reinforce our position as a leading automotive supplier and to provide more effective and advanced technical support to our customers in the Chinese market.

The facility in Yangpu will occupy a floor space of approximately 7,400 square meters and serve as Asia Headquarters office for Continental Automotive Systems, ContiTech and Continental Tires. At the same time, testing labs for selected electronics products will be moved to this facility as well. The 8,400 square meters facility in Jiading will provide office space and well- equipped labs & testing facilities for Powertrain & Chassis, Body & Security, Hydraulic Brake Systems and Electronic Brake Systems.

Dr. Karl-Thomas Neumann, President of Continental Automotive Systems and Member of the Executive Board, Continental AG, said: "China is playing an increasingly important role in the future development of the global automotive industry. The establishment of a dedicated Engineering Center in Shanghai marks a strategic step towards our goal to be one of the leading automotive suppliers in China."

"By 2010, we want to double our sales in Asia. Continental Automotive Systems' growth in China will contribute significantly to the realization of this goal," said Jay Kunkel, President of the Asia Region and member of the Management Board at Continental Automotive Systems. "With this investment, Continental Automotive Systems will continue to capitalize on the leading role that China represents for the regional growth. "

The Continental Corporation is a leading automotive supplier of brake systems, chassis components, vehicle electronics, tires and technical elastomers. In 2006 the corporation realized sales of EUR14.9 billion. It has a worldwide workforce of around 87,000.

As a worldwide leading technology partner to the automotive industry, the Automotive Systems Division of Continental AG integrates extensive know-how and uncompromising quality in the fields of driving safety, embedded telematics and hands-free communication systems, powertrain and comfort. In 2006 the Division achieved sales of approx. EUR6 billion with a workforce of more than 30,000. Continental Automotive Systems develops and produces electronic and hydraulic brake, stability and chassis control systems, electronic air suspension systems, sensors, engine management and transmission control systems, hybrid drives, cooling fan modules, body and security electronics and also is the industry leader of embedded telematics and communication systems in vehicles.

Continental Automotive Systems began operations in China in the mid 1990s and opened its Asia headquarters in Shanghai in January 2006. Today it has four plants and one winter test center in China supplying advanced Electronic Brake Systems, Hydraulic Brake Systems, Body Electronics and sensor products to the China automotive market. With the strategic acquisition of Motorola's automotive electronics business in 2006, Continental Automotive Systems further enhanced its competitiveness in China with additional engineering and manufacturing capabilities in Telematics and Bluetooth communications, Powertrain and Chassis technologies.