Contracts
-In April 2006, the Company announced it will supply the window regulators with the Audi Q7. It will also supplies power seat adjusters and the lumbar support for the latest SUV. The seat adjusters, for example, make this possible. One particular highlight is the lumbar support integrated into the backrest. Audi has already used the comfort system developed by the Company in its A4 and A6. (From a press release on Apr. 13, 2006)

Overseas Development
-The Company officially opened in Changchun its third production facility in China on Sep. 8, 2006. Brose Changchun Automotive Systems Co., Ltd is the first wholly foreign-owned enterprise of the Brose Group in China. With a headcount of approx. 140, the plant produces seat adjusters and window regulators for FAW-VW, Shiroki, Faurecia, Johnson Controls, Lear Seating und Sitech. Construction of the new production site covering approx. 16,000 square meters of usable floor space was completed in eight months. Approx. 10 million euros have been invested in the building, manufacturing equipment and information technology. (From a press release by the company on Sep. 8, 2006)

Outlook
-The Company aims to meet its growth objectives in the upcoming years and intends to do this increasingly through cooperations and acquisitions. In 2010, the group's business volume is anticipated to have grown to about 3 billion euros.

R&D
-There are total 1600 people engaged in research and develpment.(in 2005)
-Every ninth employee at the Company is engaged in the development of new products or manufacturing processes. 160 patents and utility models are filed annually.
-The Company carries out side-impact tests in its own research centers. This makes it possible to optimize its systems with regard to rigidity and use of material at an early development stage. Apart from safety aspects, the Company performs endurance tests to check the acoustics, temperature behavior, compatibility, and stress capabilities of all components.

New Product Development
"Direct Drive" window regulator
The Company presented its "Direct Drive" window regulator for the first time at the IAA 2005. It is mainly made of plastic parts, is 20 percent lighter and provides benefits in terms of assembly space. The glass attachment and drive from one unit, increasing the efficiency of the whole system to such a degree that smaller and lighter electro-motors can be used. (Released in September 2005))

"Soft Open Soft Close"
Brose unveiled "Soft Open Soft Close" that is a new closure system which acoustically and mechanically dampens side-doors and gates, enabling easier and quieter opening and closing. Moreover, sealing forces of 1,000 Newtons - more than double today's systems - are possible. The result: wind noise is lessened and crash safety enhanced. (Released in September 2005)

New Power Closure Systems
Brose unveiled new power closure systems for side doors and liftgates. The spindle drive which replaces the conventional gas strut as well as a rod drive solution which can be integrated under the vehicle roof and is 20 percent smaller and lighter than comparable products. The liftgate can be opened via remote control and the closing noise is some 30 percent less than what comparable products can provide. The door drives have anti-trap technology designed to prevent injuries. Additionally, there are sensors which recognize obstacles during opening and closing as well as protecting against damage. (Released in September 2005)

Capital Expenditures

FY2006: 123 million EUROs

Domestic Investment
Groundbreaking ceremony for door system plant in Holzgerling
In June 2006, employees and the production line for S-Class door systems are to relocate from Herrenberg to Holzgerlingen. Once door system production for another two car models commences, daily production figures are expected to increase from the current 1,500 pieces to 9,000.

-In October 2005, the Company announced it has inaugurated Wuppertal closure systems plant, which have undergone extensive modernization. The production and administration areas, which had previously been housed in two separate premises, have been combined into one facility in the Ronsdorfer industrial park. In order to accelerate the material flow, production and logistics, which used to be scattered throughout five buildings, are accommodated in one hall. By 2007, the Company will have invested some 130 million euros in the closure system business which was taken over from Bosch three years ago.

Overseas Investment
<Europe>
-In December 2005, the Company acquired a 40 percent stake in Pressan A.S., founded in 1966 and based in Istanbul, the automotive supplier is the leading manufacturer of window regulators in Turkey. Furthermore, this Turkish company produces vehicle components like latches, door handles and stamped parts. Under Brose license, Pressan produces window regulators and hood latches for the Turkish automobile market as well as stamped and plastic parts for the worldwide Brose plants. Major customers of the Turkish family-owned company include Fiat, Ford, Renault and Toyota. In 2005, the Company will generate a turnover of 45 million euros and has a headcount of 350. Business is to increase 70 million euros in 2008. With the Brose's technical and financial support, Pressan A.S. intends to further strengthen its position on the Turkish market. Having a stake in this company will give Brose better access to the growing automobile markets in the Middle East.

<Asia>
-The Company officially opened in Changchun its third production facility in China on Sep. 8, 2006. Brose Changchun Automotive Systems Co., Ltd is the first wholly foreign-owned enterprise of the Company in China. With a headcount of approx. 140, the plant produces seat adjusters and window regulators for FAW-VW, Shiroki, Faurecia, Johnson Controls, Lear Seating und Sitech. Construction of the new production site covering approx. 16,000 square meters of usable floor space was completed in eight months. Approx. 10 million euros have been invested in the building, manufacturing equipment and information technology. (From a press release by the company on Sep. 8, 2006)

-In order to respond the growing market in China, the Company decided to set up a third Chinese production site in Changchun. The plant is scheduled to go operational in early 2006.

<The Americas>
-The Company officially opened its second door system plant in the USA on 4 May 2005. Some 25 million US dollars have been invested in real estate, manufacturing equipment, logistics and information technology. Brose Tuscaloosa, Inc. has been producing door systems for the new models of DaimlerChrysler's M and R Class vehicles since the end of 2004. The facility's headcount is expected to increase from 60 to 90 by the end of the year. Annual production figures are planned to reach 720,000 units by the end of 2006.