Continental Holding China Co., Ltd. Business Report FY ended Dec. 2022

Performance

-Group sales for the fiscal year ending December 2022 are EUR 39,408.9 million, up 16.7% year-over-year (y/y). Excluding changes in the scope of consolidation and the impact of foreign exchange, sales increased 12.3% y/y due to improved performance and price adjustments in the automobiles, tires, automotive-related products, and ContiTech sectors. Additionally, there was an increase of JPY 1,513.7 million due to foreign exchange factors. Sales from the China business accounted for 12% of the group's total, and Continental's sales in China increased by more than 20% compared to the previous year.

-The Group's full-year sales for 2023 are expected to be between EUR 42 and 45 billion.

Continental's business strategy for carbon neutrality:

Starting in 2020, all the electricity that Continental uses is generated with renewable energy.
By 2040, all Continental production processes will be carbon-neutral.
By 2050 at the latest, Continental will achieve complete carbon neutrality in the value chain end-to-end. As a result, carbon neutrality will be achieved throughout for the entire business.

Capital investment

Agreement with Changchun City to build R&D site for passive safety sensors
-The company announced that its subsidiary, Continental Automotive (Lianyungang) Co., Ltd. Changchung Branch, signed a cooperation agreement with the management committee of Changchun Jingyue High-tech Industrial Development Zone in Jilin Province regarding Continental’s Asia and China Technology R&D Center for passive safety and sensors. Continental will work with Jingyue High-tech Zone to build an international automotive electronics and aftermarket service demonstration area, as well as an automotive culture dissemination and experience demonstration area. (From a press release dated March 8, 2022)

Order

Customer	Details
Changan	Continental AG (Continental) announced that it has supplied its new electronic brake systems for Electronic Stability Control (ESC), the MK 120 ESC, to Changan’s Oshan X5 Plus and Uni-T models, which has firstly entered series production worldwide in Shanghai, China. The MK 120 ESC offers over-the-air (OTA) functionality and cyber security features, such as secure boot, data security protection, etc. It adopts an embedded hardware security module in line with the high requirements for cyber security in the global industry. The brake system contains cryptographic functions that can be used to introduce security keys, which are generated individually for each product. Its lightweight and compact components help vehicles with internal combustion engines save energy, reduce emissions, and increase the range of EVs. Further production locations are planned in Europe, Japan, and India. A further start of production is also planned with a European carmaker in 2023. (From a press release dated May 17, 2023)
A well-known Chinese luxury EV maker	Elektrobit selected BlackBerry Limited to provide the foundational software for a new neighborhood electric vehicle (NEV) of a well-known Chinese luxury EV maker. Elektrobit supplied its 2nd generation EB corbos AdaptiveCore software and EB corbos Studio to create the AUTOSAR Adaptive Platform-based software framework for the new controller, which is built on the QNX Software Development Platform 7.1 and QNX OS for safety operating system from BlackBerry. Together, Elektrobit’s implementation of the AUTOSAR Adaptive Platform and BlackBerry QNX’s ISO 26262 ASIL D certified OS technology offers a complete, pre-integrated foundation for developing ADAS electronic control units (ECUs) with enhanced levels of automotive safety. (From a press release dated May 9, 2023)
Deepal	Continental Core Intelligent Driving, a joint venture with Horizon, will supply an all-in-one smart front-view camera for Deepal's first electric vehicle. (From WeChat official account on April 20, 2023)
BYD	Continental AG (Continental) announced that BYD has chosen Continental’s EcoContact 6 Q tires as original equipment (OE) for its all-electric SUV Atto 3 worldwide. The approved tire line and size is 235/50 R18 101V XL. These tires own a special rubber compound that help minimize energy absorption while the vehicle is in motion. The EcoContact 6 Q also ensures reduced friction, low rolling resistance, and low rolling noise. In addition to short braking distances, this tire offers exceptional grip on dry and wet roads and excellent cornering stability even at high speeds. (From a press release dated March 22, 2023)
Great Wall Motor	The company announced that it became a supplier of driver-centric V-shaped double-screen interaction systems for Great Wall Motor’s Haval brand Shenshou. The V-type screen is designed to make it easier for drivers to see information. It has a special shape that allows all content to be in the driver's field of vision at an equal distance. (From a press release dated July 15, 2022)

Strategic alliance

Partnership	Details
Horizon	-Continental announced that Continental Smart Core Technology (Shanghai) Co., Ltd. (Continental SCT), a joint venture between it and Horizon Robotics, will create a driving-parking integration domain control 3.0 product based on a next-generation Horizon Robotics chip. The product will support Level 2+ NOA (Navigation on Autopilot) features and be integrated with higher-level parking functions for end-to-end ADAS features, providing international and Chinese OEMs with full-stack solutions. Continental SCT has been negotiating with multiple Chinese OEMs on cooperation on driving-parking integration domain control 1.0 and 2.0 solutions it previously developed based on Horizon Robotics’ Journey 3 and Journey 5 high-performance chips and algorithms. (From a Continental press release dated April 28, 2023)
Leapmotor	-Leapmotor announced that it officially signed a strategic cooperation framework agreement with Continental at the Auto Shanghai 2023 event. The two parties will conduct a comprehensive and in-depth cooperation in the field of safety and dynamic control, strengthen cooperation on intelligent OEM services, and equip a number of Leapmotor models with advanced products and technologies such as Continental’s braking systems, passive safety sensors, and integrated safety solutions. (From a Leapmotor press release dated April 20, 2023)
NavInfo	-NavInfo Co., Ltd. (NavInfo) announced that its subsidiary, AutoChips Inc. (AutoChips), established a partnership with a subsidiary of Continental AG-Elektrobit, a global vendor of embedded and connected software products and services for the automotive industry. The two parties will employ EB tresos to develop software on the AUTOSAR platform. They will build an integrated solution for hardware and software, which will enable OEMs and Tier 1 suppliers to conduct electronic control unit (ECU) development with AUTOSAR. (From a press release dated March 13, 2023)
Novosense	-Suzhou Novosense Microelectronics Co., Ltd. (Novosense), an automotive chip supplier in China, announced a partnership with Road-Broad Automotive Electronics (Qufu) Co., Ltd. (Road-Broad Automotive Electronics), a joint venture between Continental and Qufu Temb Auto Manufacturing Co., Ltd. Novosense and Road-Broad Automotive Electronics signed a product cooperation agreement on the localization of wheel speed sensors. The two companies will explore possibilities for cooperation in product technology and security. (From a press release dated February 9, 2023)
Harsons Enterprise	-The company announced that Continental Automotive (Jinan) Co., Ltd, its wholly-owned subsidiary in China, has officially signed a strategic cooperation agreement with Guangzhou Harsons Enterprise Management Service Co., Ltd. (Harsons). The two parties will launch strategic cooperation in the field of intelligent sunshades to expand their business in the automotive aftermarket. (From a Continental official WeChat account press release dated October 21, 2022)
Motovis	-The company announced that it will work with Motovis, an autonomous driving developer in China, to jointly develop intelligent mobility solutions that are specially designed for Chinese traffic scenarios with optimized costs. The new system solution will be able to cover various passenger vehicle models from low-cost ones to premium vehicles. It is multi-functional with low cost, low consumptions, and excellent safety. The system is expected to be installed in China-branded passenger vehicle models in 2023. (From a press release dated June 13, 2022)
Changchun Jingyue High-tech Industrial Development Zone	-Company subsidiary, Continental Automotive (Lianyungang) Co., Ltd. Changchung Branch, signed a cooperation agreement with the management committee of Changchun Jingyue High-tech Industrial Development Zone in Jilin Province regarding the Company’s Asia and China Technology R&D Center for passive safety and sensors. The Company will work with Jingyue High-tech Zone to build an international automotive electronics and aftermarket service demonstration area, and an automotive culture dissemination and experience demonstration area. (From a press release dated March 8, 2022)

Investment within China

-The Company announced an investment in Shanghai Enjoy Move Technology Co., Ltd. (Enjoy Move). Enjoy Move specializes in the R&D and service of high-performance computing software platforms and autonomous driving software products. EMOS, Enjoy Move’s proprietary intelligent driving middleware platform, can be applied to high computing power scenarios such as intelligent driving, central gateway, and service-oriented architecture. The platform is compatible with mainstream chip platforms. The cooperation with Enjoy Move will help the Company better serve local customers, and accelerate the application and mass production of intelligent driving products. (From a press release dated July 28, 2022)

New factory/R&D center

Project	Details
4th phase project of Shanghai factory	-The Company announced the groundbreaking of a Phase IV project at the Shanghai Plant of Continental Automotive Systems (Shanghai) Co., Ltd. (Continental Automotive Systems), its subsidiary, in Jiading. Covering a land area of about 28,000 square meters, the new plant buildings are planned to be commissioned in the second half 2025 and will mainly produce for the Safety and Motion division and the Autonomous Mobility division. The project will be built to the standards of an intelligent plant to be certified for LEED Gold, and will be equipped with a digital information system, an intelligent energy management system, an advanced safety and firefighting system, and an intelligent administration and attendance management system. (From a Continental AG press release dated May 25, 2023)
Phase III expansion project of the Changzhou Plant	-The Company started the Phase III expansion project of the Changzhou Plant, its second joint venture (JV) in China with Jiangsu Changshun Group. Changzhou Plant is expected to add an annual capacity of 13 million square meters of high-performance composite surface materials, bringing the total annual capacity to 35 million square meters. Over the course of the project, 12,000 square meters of plant buildings, 3,250 square meters of raw material warehouses, and 1,500 square meters of facilities rooms will be constructed. In addition, about 1,000 square meters of the existing plant buildings will be renovated. The completion of the project is scheduled for May 2024. It will also feature smart production facilities like automatic defect detection and identification system, AGV, sample delivery robot, etc. In the phase III expansion project, the Plant will increase its production capacity of Acella surface materials in China. In addition, the patented development and production of a variety of environmentally friendly, low-odor, low-temperature resistant PVC artificial leather will also be a highlight of the Changzhou plant. (From a press release dated April 12, 2023)
5G Digital super factory	-The Company announced the official opening of the Changsha Super Factory in the Changsha Economic and Technological Development Zone of Hunan Province. As the world’s first 5G digital super factory built by Continental, the plant features advanced production processes and cutting-edge production technologies such as SMT (Surface Mounting Technology), display optical lamination, backlight assembly, and display packaging and testing. The plant’s SMT back-end testing lines are 100% automated. In addition, the plant is equipped with digital production technologies such as virtual process route planning, virtual equipment commissioning, big data, artificial intelligence, and intelligent maintenance. The plant has an investment of over CNY 500 million in plant construction, infrastructure and equipment, and covers a total site area of around 80,000 square meters and a total building area of around 28,000 square meters. The plant will provide innovative user experience solutions such as large LCD displays and HUDs (head-up displays). (From a Continental official WeChat account press release dated December 15, 2022)
the Second phase of its Qufu plant	-The Company announced that it broke ground on the second phase of its Qufu plant in Shandong Province, China. It is scheduled to start production in early 2024. The expansion includes the construction of infrastructure such as plants, R&D centers, office buildings, canteens, and warehouses. These facilities will be used to produce wheel speed sensors and sensors for engine management. (From a press release dated February 9, 2023) -The Company’s subsidiary, Road-Broad Automotive Electronics (Qufu) Co., Ltd., signed a cooperation agreement with the Management Committee of the Qufu Economic Development Zone of Shandong Province to officially launch the second phase construction project of the Qufu plant. The project covers a total area of 400,000 square meters and a construction area of 80,000 square meters, and will support the company’s development, production and sales, after-sales service, and import and export of products such as automotive speed sensors. Approximately 100 new automated wheel speed sensor and engine sensor production lines are planned for future construction across two phases. (From a Continental AG official WeChat account press release dated November 17, 2022)
Changchun Technology Center (CTCC)	-The Company announced that a new R&D office building at its Changchun Technology Center (CTCC) started operation. The CCTC is the R&D center of the BU PSS (Passive Safety and Sensorics) under Continental AG's Safety and Motion Business Group, primarily working on the R&D of automotive passive safety solutions. The CCTC currently has nearly 400 R&D staff members. Continental also announced that its subsidiary Continental Automotive (Changchun) Co., Ltd. established a cooperation agreement with the Changchun Jingyue High-tech Industrial Development Zone Management Committee to expand the Jinyue plant. The Jingyue plant was established in Changchun Jingyue High-tech Industrial Development Zone in 2012, covering a land area of about 148,000 square meters and a construction area of about 73,000 square meters. It mainly engages in activities including the R&D and production of automotive electronic products in the fields of vehicle connectivity and architecture, smart mobility, and safety and motion control. (From a press release dated September 23, 2022)

New product

Smart sunshade
-The company announced the launch of a smart sunshade in Shenzhen. Through smart capabilities such as voice control and gesture control, the sunshade alleviates New Energy Vehicle’s exposure to the sun, contributing to more comfortable rides in summer. At the Automechanika Shanghai 2023 actually held in Shenzhen, Continental presented this product and aftersales spare parts solutions. (From a press release dated February 17, 2023)

Exhibition

-The company announced that it will exhibit the AMBIENC3 concept vehicle that uses sustainable materials as well as rubber vibration-isolation suspension components for electric vehicles (EVs) at the Auto Shanghai 2023. The AMBIENC3 applies Continental ContiTech’s sustainable surface solutions, with natural and renewable raw materials or recycled and reclaimed materials used in the vehicle to reduce emissions while ensuring that passengers can breathe safely. The rubber vibration-isolation suspension components for motors are designed using polyamide materials instead of conventional metal mounts and feature innovative technologies such as double-layer shock isolation, a unique rubber structure and a custom-developed rubber formulation to provide unique NVH performance for EVs at a high frequency, achieving a 30% weight saving on a single product, and effectively extending the ranges of EVs through energy saving and emission reduction.(From a Continental press release dated March 31, 2023)

R&D Centers

R&D Center	Location	Business
Continental Investment (China) Co., Ltd. Formerly: Continental Automotive Holding Co., Ltd.	Shanghai	Established in 2007. Operations and R&D center of Continental Group (China)
Jiading R&D center of Continental Automotive Group	Shanghai	Established in 2007. R&D of electronically controlled brakes systems, hydraulic brake systems, and engine systems.
Continental Automotive Systems (Shanghai) Co., Ltd.	Shanghai	Established in 2001. R&D of electronically controlled brake systems, and body and safety.
Nanjing Software R&D center	Nanjing, Jiangsu	Established in 2011. Development of automotive ID instruments and software embedded in instrument products of mid- to high-end vehicles.
Continental Heihe Winter Test Center	Heihe, Heilongjiang	Established in 2012. Conducts winter testing for electronically controlled brake systems.
ContiTech Changshu R&D center	Changshu, Jiangsu	Established in 2013. Develops vibration control products.
Hefei R&D center of Continental Tire (China)	Hefei, Anhui	Established in 2015. Tire development and testing
Continental Yancheng Test Center	Yancheng, Jiangsu	Established in 2016. Test and validation of Continental safety products and systems, such as electronic and hydraulic brake systems, advanced driver assistance systems (ADAS) and tires.
Continental Automotive R&D (Chongqing) Co., Ltd.	Chongqing	The groundbreaking ceremony for the first phase of the process was held in June 2017. It was scheduled to begin operations at the end of 2018 as a focus for the development of products and solutions for automotive electronics product applications, New Energy Vehicles and industrial sectors.
BU ET Asia R&D Center	Tianjin	Focuses on hybrid power and electrified powertrain technology. Completed at the end of 2021 and scheduled to start operations.
ContiTech Hydrogen & Fuel Cell Competence Centre	Changshu, Jiangsu	Develops and produces hydrogen energy and fuel cell related products for New Energy Vehicles.
Continental Changchun Technology Center (CCTC)	Changchun, Jilin	The company is focused on developing advanced technologies, products and passive safety solutions and has approximately 400 research and development personnel. A new research and development building opened in 2022.
China Smart Manufacturing Innovation Center	Changsha, Hubei	The world's advanced digital technology and management concepts will be introduced, implemented, verified and optimized in the Changsha plant and other plants, and more advanced and mature intelligent manufacturing concepts, experience and technology will be shared.
Continental Jiading Test Center Project	Shanghai	-Scheduled to be completed in 2024. A small test site will be built near the Jiading Technology Center to support the development of new generation electronic brake products such as the MK C2, which can better support various New Energy Vehicles and various levels of autonomous driving functions.