---

Continental Reports Consolidated Earnings

16 March 1999

Continental: Another Improvement in Consolidated Earnings; Fourth Consecutive Dividend Increase

    HANNOVER, Germany, March 16 -- Profits before income taxes at
the Continental Corporation rose by DM 153 million to DM 611 million (+33%) in
1998. Net income for the year increased by DM 92 million to DM 414 million
(+29%). Strong volume growth, a better product mix, and ongoing programs to
enhance efficiency were the decisive factors for this repeat improvement in
performance.
    The equity ratio decreased from 35.3% to 23.1 %. Indebtedness rose as a
result of acquisitions to DM 3,659.1 million (1997: DM 554.5 million); without
the acquisitions, indebtedness would have decreased again considerably.
    Consolidated sales jumped 17.9% from DM 11.2 billion to DM 13.2 billion.
This growth in sales stems from higher volumes sold in all of the groups and
to first-time consolidations mainly involving the inclusion of Continental
Teves' business for the last quarter of fiscal 1998, which added DM 1.1
billion to sales.

    The Groups:

    Passenger Tires, including the dealer organizations, reported a 7.3% sales
increase to DM 4.67 billion. Disregarding changes to the scope of
consolidation, growth would have been at 5.6%. Unit sales of winter tires were
maintained at the previous year's record level. Losses of the dealer
organizations were almost halved on a year-on-year basis. On the whole, the
Passenger Tire Group was able to improve its earnings significantly.

    Commercial Vehicle Tires strengthened its sales by 13.3% to reach a total
of DM 1.49 billion. Without the change to the scope of consolidation due,
among others, to the initial consolidation of Continental Tyre South Africa,
sales would have risen by 9.4%. Sales gains were recorded in both the original
equipment and the replacement sectors. This group reported a substantial
profit for the first time since it was established.

     Continental General Tire posted a sales increase of 2.0% to DM 2.40
billion. Growth was achieved in both the passenger tire and the commercial
vehicle tire divisions. Earnings showed a gratifying improvement despite a
strike at General Motors as well as a strike at the company's Charlotte plant.

    ContiTech reported sales of DM 3.33 billion, which is equivalent to a rise
of 7.7%. Excluding changes to the scope of consolidation, sales would have
risen by 9.4%. The group benefited from further gains in market share, the
boom in the automotive industry, as well as higher volumes of non-automotive
products. Owing to non-recurring charges and provisions for restructuring,
earnings were below the previous year's level. Disregarding these special
expenses, earnings were slightly higher than in the previous year, although
they were additionally depressed by negative price effects as well as start-up
costs for many new products.

     Sales at Continental Automotive Systems amounted to DM 1.23 billion due
to the initial inclusion of Continental Teves for the fourth quarter of 1998.
Although a slight loss was recorded, Continental Teves made a highly positive
contribution overall.
    On December 31, 1998, the number of employees working for the Corporation
had risen by 17,560 to 62,357. About 15,000 of these additional employees were
attributable to the acquisition of new companies, and, in particular, to
Continental Teves, General Tire de Mexico and Continental Tyre South Africa.
    In view of the further improvement in consolidated earnings, the Executive
Board will propose to the Supervisory Board at their meeting to discuss the
financial statements on April 12, 1999, that the dividend be increased to DM
0.80 (1997: DM 0.70) for each no-par-value share.  The dividend does not
include any corporation tax credit.