Continental AG Business Report FY2011

Business Highlights

Financial Overview

(in million euros)
  FY2011 FY2010 Rate of
Sales 30,504.9 26,046.9 17.1 1)
EBITDA 4,228.0 3,587.6 17.9
Chassis & Safety
Sales 6,510.8 5,775.4 12.7 2)
EBITDA 982.3 891.7 10.2
Sales 5,842.0 4,730.8 23.5 3)
EBITDA 484.7 268.2 80.7
Sales 6,110.7 5,518.1 10.7 4)
EBITDA 758.8 619.2 22.6
Passenger and Light Truck Tires
Sales 6,957.5 5,820.8 19.5 -
EBITDA 1,335.5 1,241.0 7.6
Commercial Vehicle Tires
Sales 1,854.0 1,427.8 29.9 -
EBITDA 191.0 142.2 34.3
Sales 3583.1 3,095.3 15.8 -
EBITDA 515.0 468.2 10.0

-Sales increase was the result of the outstanding product portfolio of its Automotive divisions, which is strongly concentrated on the high-growth segment of the automotive supplier industry, and of the ongoing recovery in its relevant markets. The increase in the production of cars, station wagons and light commercial vehicles had a positive influence on business performance in 2011. Sales in the regions of Europe, America and Asia surged by a double-digit percentage. The negative effects of exchange rate changes were more than offset by the positive effects of the change in the scope of consolidation.

2) Chassis & Safety
-Sales volumes in the EBS business unit rose by 10.1% year-on-year to 18.3 million units.

-In the Hydraulic Brake Systems business units, sales of brake boosters increased by 24.0% year-on-year to 18 million units. Sales of brake calipers surged by 27.9% as against the year before to 42 million units.

-In its Passive Safety & Advanced Driver Assistance Systems business unit, sales of air bag control units were up 15.1% as against the previous year to 14.3 million units. Sales of driver assistance systems soared by 61.4% year-on-year to 1.7 million units.

3) Powertrain
-Sales in the Powertrain division expanded by 23.5% year-on-year in 2011. The Transmission business unit extended its position with strong growth rates in Asia and NAFTA in particular. The Engine Systems business unit posted significant sales increases with its gasoline injection systems in NAFTA especially and diesel injection systems mainly in Europe. The Sensors & Actuators business unit generated growth rates of over 20% on emission control products in particular. The Hybrid Electric Vehicle business unit had a major start-up in start-stop applications while the Fuel Supply business unit enhanced its sales in Asia and NAFTA particularly.

4) Interior
-Sales volumes in the Body & Security business unit were up for the majority of product groups in 2011. Particularly high increases were seen in access control and starting systems, door control units, comfort locking systems and seating comfort systems. In the Infotainment & Connectivity business unit, sales volumes for audio and connectivity components declined in fiscal 2011. This development was primarily influenced by lower demand for audio products in the USA market as well as for audio and connectivity products at some European vehicle manufactures. In the area of multimedia systems, sales volumes rose due to increased demand from China and Europe.


-The Company announced that it will consolidate the Passenger & Light Truck Tires (PLT) and Commercial Vehicle Tires (CVT) divisions into one Tires division effective August 1, 2011. In 2010, the PLT division generated sales of 5.8 billion euros and the CVT division recorded sales of 1.4 billion euros. Combined, sales in the two tire divisions worked out to around 7.2 billion euros in 2010. Together they thus constitute the corporation's largest division. (From a press release on June 8, 2011


-Honda Motor Co., Ltd. will use German-based Continental's electronic stability control (ESC) system in its "N-Box" mini vehicle scheduled for release on December 16. The "N-Box" is the first among mini-vehicle lineup of Honda to incorporate ESC as standard equipment. In Japan, ESC will be made compulsory on all new non-mini vehicle models to be launched in October 2012 or later, and also on new mini vehicles coming to the market in October 2014 onwards. Prior to the introduction of the new regulations, Honda is adopting the ESC system as standard on all flagship vehicles, highlighting its commitment to offering advanced driving safety technologies to its customers. The initiative is likely to accelerate other mini vehicle manufacturers' move to introduce ESC systems to their vehicles. The Company is already supplying its newest MK100 ESC technology to Honda for some of its "Insight" vehicles. It has made some modification to the MK100 for installation on the "N-Box", which employs disc brakes on the front wheels and drum brakes on the rear wheels. The MK100 ESC will be manufactured on production lines at Continental's Hamakita Plant (Hamamatsu City, Shizuoka Prefecture, Japan), which will be expanded for the program. (From an article in the Nikkan Jidosha Shimbun on December 13, 2011)

-The Company has won a program from a Japanese automaker to supply a driver assistance system, which includes an automatic brake designed to prevent a collision at a low speed driving. The technology will probably be mounted on Mazda Motor's new SUV scheduled for release by early 2012, marking the first time for Continental's drive assistance product to be featured on a vehicle produced by a Japanese company. The supplier has been chosen for its low cost, infrared-based short-range sensor technology to detect obstacles as well as its extensive experience in dealing with European automakers. The company is proposing the driver assistance system also to other Japanese automakers, aiming to foster the business as a new area of priority targeting Japanese vehicle manufacturers. (From an article in the Nikkan Jidosha Shimbun on October 13, 2011)

-The Company announced that it will supply Ford with its new turbochargers for the carmaker's new three-cylinder direct injection gasoline engines. The engines are slated for installation initially in the 2012 Ford Focus and later, in the Ford "C-Max" and in the new Ford "B-Max". The turbocharger's 38-millimeter diameter turbine rotates at up to 240,000 revolutions per minute (4,000 revolutions per second) in the exhaust flow, which can reach 1,050 degrees. The new Continental turbochargers will be manufactured by Schaeffler, Continental's partner in this venture, at its production plant in Lahr, Germany. The site will have production capacity for up to two million turbochargers a year. (From a press release on October 11, 2011)

-The Company announced that Lane Keep Assist of the Ford "Focus" is based on a camera sensor system developed by Continental; it monitors the road area in front of the vehicle and its analysis module determines the vehicle's position in relation to the road markings. In addition to the camera sensors for Lane Keep Assist, Intelligent Headlamp Control and Traffic Sign Recognition, the optical sensor using infrared beams for Emergency Brake Assist, also developed by Continental, has been installed in the Ford "Focus". (From a press release on October 5, 2011)

-The Company is supplying its electric motors for Renault "Kangoo Z.E." and "Fluence Z.E." electric models. Renault uses Continental motors with power outputs of up to 70kW / torque of up to 226 Nm. Compared with a traditional combustion engine which, excluding the transmission, weighs between 80kg (for a 1.2L engine) and 150kg (for a 2L engine), Continental's electric motor is far lighter weighing only 77kg. Continental is producing the motor in Gifhorn, Germany, currently with a capacity of some 60,000 units. Volume will rise to 75,000 motors a year as of 2012. More than 12 million euros has been invested in the new production line in Gifhorn. (From a press release on September 13, 2011)

-The Company announced that it has numerous series orders to show for itself for the 2009-to-2013 time span: Roughly 90 series projects with 17 manufacturers' worldwide involving components for electric and hybrid vehicles. These include key components, such as, for example, electric motors, power electronics, battery technology, instrumentation, telematics, regenerative brake systems, sensor systems and components for safe charging. Close to 60 percent of these projects are for components and systems for e-vehicles. A large share of these are developed and produced in Europe; products for some orders are manufactured in Asia. (From a press release on September 13, 2011)

-The Company announced that it is supplying the ContiTech air springs with plastic pistons for the drive axles of the new "Actros" from Mercedes-Benz. Up to 75% of the weight of conventional steel pistons is saved by using a special plastic, leading to savings of up to 12 kg per axle. ContiTech Air Spring Systems produces components and complete systems for adjustable air suspensions in commercial vehicles, buses and trailers at seven locations. It is planning to set up production locations in India and Brazil in 2012. (From a press release on August 10, 2011)

-The Company announced that it has been awarded a contact to supply its ContiSportContact 5 P MO for the Mercedes-Benz "CLS". Tires of the sizes 255/35R19 and 285/30R19 will be fit on the "CLS". The company will also equip the Mercedes-Benz "Viano" and "Vito" with its ContiSportContact 5 of the size 245/45R19. (From a press release on August 4, 2011)

-The Company is supplying passive safety systems to the electrically powered "EcoCarrier" light truck by EcoCraft Automotive of Germany. The vehicle is already available on the European market. Its specification will include a front-seat airbag system and three-point safety belts by the end of 2011. (From a press release on March 9, 2011)


-The Company announced that it has completed the acquisition of 100% shareholding in Modi Tyres Company Limited (MTCL), an India-based subsidiary of Modi Rubber LTD. The purchase price consideration for 100% of the shares of MTCL is approximately 18.5 million euros. MTCL will be renamed as Continental Tyres India Limited. The new entity will focus on local production and distribution of bias and radial truck and bus tires as well as radial passenger car tires for the Indian market. Continental Tyres India will have its registered office in Delhi with manufacturing facilities both in Modipuram and Partapur. (From a press release on July 18, 2011)

-The Company announced that it has acquired the Radar Engineering Unit located in Ottobrunn, Germany of Magna Electronics, an operating unit of Magna International, anticipated to be effective July 1, 2011. Under this agreement eleven engineers will be transferred to Continental. The sale of the Radar Engineering Unit will allow Magna Electronics to concentrate on the development of camera-based technologies and systems. Both companies agreed not to comment on the purchasing price. (From a press release on June 20, 2011)


-The Company has been awarded the 2010 Innovation Prize for Climate and Environment for its piezo injector from the Federal Ministry for the Environment and the Federation of German Industries. The piezo injector, in which the nozzle needle is driven directly and without hydraulic assistance, is able to control the injection process even more precisely. This makes it possible to reduce fuel consumption by up to five percent. The new system will first go into series production with a major vehicle manufacturer from 2013 on. (From a press release on March 16, 2011)


R&D Expenditure by Divisions

(in million euros)
  FY2011 FY2010 FY2009
Chassis & Safety 463.1 422.3 380.8
Powertrain 454.9 396.9 328.8
Interior 449.6 407.9 434.7
Passenger and Light Truck Tires 129.9 120.8 113.5
Commercial Vehicle Tires 46.2 41.8 40.5
ContiTech 65.0 60.7 58.0
Total 1,608.7 1450.4 1,356.3

R&D Facilities

-The Company announced that it has built a new testing and development laboratory for automotive electronic transmission-control systems in Nuremberg, Germany. The new center measures 2,500 square meters, 1,500 square meters of which are devoted to laboratory space and 1,000 square meters of which will be used for office space. The company spent 7.5 million euros on the complex. Its laboratories and offices will provide space for 100 new jobs. (From a press release on June 9, 2011)

-Continental Tire the Americas, LLC announced that it has inaugurated its new test surface, capable of running both wet and dry tire and vehicle dynamics tests. The new surface with an investment cost of approximately 3.5 million USD (approximately 2.5 million euros) is part of Continental's Proving Ground, situated in Uvalde, Texas U.S. The Vehicle Dynamics Area spans an area of 640,000 square feet (60,000 square meters). (From a press release on May 23, 2011)

-The Company held the groundbreaking ceremony for its new R&D center in Singapore. By April 2012, the new site will have a seven-story R&D building with a total floor space of 10,170 square meters. With a total capital investment of about 21 million euros, the new center aims to increase engineering capabilities for instrumentation clusters and displays, multimedia and telematic devices, radio navigation devices, center stacks, interior modules and control systems. (From a press release on March 18, 2011)

R&D Structure

-The Company and Darmstadt Technical University (TU) of Germany signed an agreement for joint research. As part of the PRORETA 3 project, they intend to develop a driver assistance system aimed at avoiding accidents and mitigating the consequences of accidents in city traffic. The first collaborative PRORETA research project (2002-2006) examined emergency braking and emergency steer assistance. In the second stage (2006-2009), overtaking assistance for avoiding accidents with oncoming traffic was investigated. (From a press release on January 20, 2011)

Technological Alliance

-The Company and Brabus GmbH, a Germany-based manufacturer of cars, are entering into a technology partnership. Continental and Brabus dispose of wide-ranging know-how in the production of safer products in the high-end segment. (From a press release on September 28, 2011)

-The Company announced that it has signed an agreement with Darmstadt, Germany-based company Akasol Engineering GmbH to co-develop high-voltage lithium-ion battery systems for electric vehicles. Akasol Engineering develops and produces lithium-ion battery systems for the automotive and commercial vehicle industry. The lithium-ion technology uses a fluid cooling system that ensures uniform cooling of all battery systems and therefore enhanced battery performance – as well as greater vehicle range and a significantly longer service life. The battery concept can be flexibly adapted to suit various vehicle concepts and applications, from compact cars to city buses and trucks. (From a press release on September 12, 2011)

Product Development

Halogen-free interior foils
-ContiTech division Benecke-Kaliko developed the new halogen-free interior foils. They are significantly lighter than established polyvinyl chloride product, for example they cut weight by 25 percent to 50 percent. This is all down to the low density of the polyolefin-based thermoplastic elastomers which enables a weight reduction of more than 2kg per vehicle. (From a press release on December 1, 2011)

Vehicle position sensor
-The Company has developed a new M2XPro (Motion information 2 X Provider) sensor that fuses driving dynamics sensor information with GPS data, which will make it possible to determine the precise position of a vehicle within its lane. At present, the new sensor exists as a concept study for trialing in prototype vehicles. By 2015, the M2XPro will have been developed to the point that the sensor can be used in the first Car2X systems, which includes Car-to-Car and Car-to-Infrastructure communication. The M2XPro can then also be combined with the Company's antenna module. (From a press release on November 17, 2011)

Cockpit for buses and coaches
-The Company developed a new cockpit solution, Driver's Workplace+ for buses and coaches. Continental has equipped the new cockpit with holders and ports for mobile terminals, allowing phones, satellite navigation terminals, fleet management computers and toll terminals to be placed. The new product was developed by the Business Unit Commercial Vehicles & Aftermarket. (From a press release on October 17, 2011)

New fixed-type caliper brake for medium-sized passenger cars
-The Company has developed a new fixed-type caliper brake for medium-sized passenger cars. Compared with the fist-caliper brakes widely used at present, this new design can save up to 1.5 kg per wheel. The new aluminum monobloc brake caliper is fundamentally much more robust in terms of brake squeal – previously a known problem with fixed calipers. The new fixed-type caliper is primarily designed for the front axle, but can also be scaled for the rear axle. (From a press release on August 15, 2011)

Pressure sensor for a hood lifting mechanism
-The Company has developed and started receiving orders for a pressure sensor for a hood lifting mechanism, which will detect possible accidents involving pedestrians in the front and raise the hood of the vehicle to mitigate pedestrians' injuries. The pedestrian protection system is one of automotive passive safety technologies. The company is going to step up proposals of its further sophisticated sensor, as demand for pedestrian protection products is growing especially in Europe. Continental will make the system available also to Japanese automakers for installation in their vehicles sold in Europe and other regions. After launching the development project in the summer of 2009, the company achieved putting the new system on a car in November the same year. Engineers at Continental worked hard on optimizing the sensor accuracy levels so that the system will not activate when the vehicle hits low-impact objects including small animals and balls. Having completed the prototype of the sensor system in the spring of 2010, the company plans to start commercial production this summer. The technology will be tested at European and U.S. automakers, starting in June, which will be followed by pilot studies at eight more companies. (From an article in the Nikkan Jidosha Shimbun on July 14, 2011)

CCI ignition system and COSI injection control system
-The Company developed the Continuous Current Ignition (CCI) ignition system and the Controlled Solenoid Injection (COSI) injection control system. CCI reliably ignites lean mixtures in the combustion chamber. COSI makes it possible to control the injection of the minutest quantities of fuel into the cylinder, thus achieving rapid catalytic converter response, fewer particulate emissions and low fuel consumption. Moreover, in conjunction with Continental's recently developed high-pressure fuel pump, the fuel injection system runs significantly more quietly. All the components are controlled by the new EMS 3 engine management platform. (From a press release on May 5, 2011)

New center stack module
-The Company has developed a new center stack module containing an 8“-color display. Using black panel technology, control elements such as virtual switches and slide controls are only visible when the illumination is activated. The center stack is either connected to a central head unit or to an HMI controller. (From a press release on March 23, 2011)

Sensor for electric and plug-in hybrid vehicles
-The Company has developed evSAT (Satellite for Electric Vehicles) sensor for electric and plug-in hybrid vehicles. This sensor will immediately shut-off batteries in the event of a collision while the vehicle is in charge mode. Starting in 2012, the company will mass produce the sensors at its Regensburg plant in Germany, supplying them to a German automaker. (From a press release on February 9, 2011)

Investment Activities

Capital Expenditure

(in million euros)
  FY2011 FY2010 FY2009
Chassis & Safety 327.1 247.1 159.5
Powertrain 393.7 301.5 247.2
Interior 247.7 191.3 131.3
Passenger and Light Truck Tires 527.2 404.3 198.3
Commercial Vehicle Tires 109.9 51.2 40.5
ContiTech 110.6 100.3 82.8
Other/Consolidation (4.9) 0.7 (0.2)
Total 1,711.3 1,296.4 859.4

Rubber Group
-The Company announced an extensive investment program because of the strong demand for passenger and light truck tyres. The plants in Mount Vernon / USA and Camacari /Brazil will be expanded with additional annual capacities of around four million each and the new plant in Hefei, Anhui province, China opened at the start of 2011, two months earlier than planned. Additional new tyre plants are currently in the planning stage in the USA and Russia. Continental is planning to produce around 124 million passenger and light truck tyres in 2011. With headquarters and the research and development centre in Hanover, Germany, Continental operates seven tyre plants in Europe alone. In Germany, the company produces around 20 million passenger and light truck tyres each year in the plants in Aachen and Korbach, with additional plants in France, Portugal, Romania, Slovakia and the Czech Republic. (From a press release on June 9, 2011)

Investment Outside Germany

-The Company announced that it is building a new tech center in the Salto Industrial Park, Sao Paulo State, Brazil to expand its capabilities for testing emission, homologation and calibration on gasoline and diesel engines. With an investment of 23 million reals (9.3 million euros), the tech center is expected to be completed by the middle of 2012. Continental's future tech center will occupy a total area of 2,400 square meters and will be equipped with various equipments such as chassis and engine bench dynamometers and a chemical laboratory. (From a press release on November 21, 2011)

-The Company will invest 210 million USD to expand production capacity of its tire plant located in Camacari, Bahia, Brazil. It will allow the company to almost double the production capacity of its plant by the end of 2015. In 2010, the Continental factory produced about 4.5 million passenger tires and 350,000 truck tires. In 2011, capacity will increase to more than 5 million passenger tires and 450,000 truck tires. (From a press release on March 15, 2011)

-The Company announced that it held a groundbreaking ceremony for its second automotive electronics manufacturing plant in Changchun, Jilin province, China. The total investment is valued at 300 million RMB (approximately 35 million euros). Full-fledged production is scheduled to commence in September 2012. By then the new plant will take over production for the Chassis & Safety and Interior divisions from the existing automotive electronics Changchun plant. The existing plant in Changchun currently manufactures products for 136 customers in 58 locations across China and exports to 73 customers in 19 countries worldwide. (From a press release on October 20, 2011)

-The Company announced the opening of its fully-owned new production facility, which is located in the Lingang Economic Development Zone in Jinan, Shandong province, China – Continental Automotive Jinan Co., Ltd. It is Continental's first facility in China that specializes in manufacturing electronics for commercial vehicles and the aftermarket. The investment is valued at 57 million Chinese yuan (approximately 6.2 million euros), and the total floor space of the new facility in Jinan is 21,169 square meters. With the new location, Continental has created 210 employment opportunities, which is expected to double by 2015, and in total, Continental has increased its production facilities to 18 in China. The new plant will initially focus on the production of instrument clusters for commercial vehicles in 2011, and is capable of producing 66,000 units per month, boosting total annual production capacity to as much as 792,000 units. The company also plans to include production of body and chassis electronics starting in 2012. (From a press release on May 27, 2011)

-The Company opened its first Chinese tire plant in Hefei, Anhui province. Continental's investment will add up to more than 185 million euros. The new facility will have an annual production capacity of four million passenger tires, which will be sold in the local Chinese and Asian market. The targeted total production volume of the entire Hefei plant is 16 million tires, for which further investments for the expansion of the existing production capacity are planned in the near future. In 2011, the first high-volume products from the new plant will include the ContiPremiumContact 2 and ContiComfortContact 5, both of which are tailored for the Chinese market. With this investment, Continental will be creating 200 jobs at Hefei in 2011, in addition to the more than 400 existing ones. (From a press release on May 18, 2011)

-The Company will build a new tire plant in Sumter, South Carolina, U.S.. Continental expects to begin construction of the plant in mid-2012 and complete the facility in 2013. The first phase of production capacity at the plant in this project is expected to be nearly five million passenger and light truck tires when the plant reaches full production levels in 2017. A second phase in this announced project is expected to bring the plant's capacity to eight million units per year by 2021. Altogether, those initial phases of the project involve an investment of more than 500 million USD and the creation of more than 1,600 jobs. In 2011 alone, the company has announced manufacturing investments of nearly 1 billion USD which are dedicated to increasing its production capacity in the Americas region. (From a press release on October 6, 2011)

-The Company announced that it plans to expand its tire plant in Mt. Vernon, Illinois, U.S.. The company will invest 224 million USD in the facility over the next three years. Of the 224 million USD, 171 million USD will be directed for new machinery and equipment, and 53 million USD will be directed for building and infrastructure. The Mt. Vernon plant capacity will increase by approximately four million tires per year. Along with the investment come a total of 444 new full-time jobs to be filled over the next four years. (From a press release on May 13, 2011)

-The Company announced its expansion plans for the Indian market. Continental India will be increasing the production of the Modipuram plant to over half a million bias truck and bus tires (TBX) in 2011. There are plans for TBX production to grow continuously to more than one million units in 2013. In addition, Continental India announced further investments of more than 50 million euros to start production of radial tires for passenger cars and commercial vehicles in the second half of 2013. Continental India plans to increase its headcount from the current 1,600 employees up to 2,200 to 2,400 within the next few years. (From a press release on August 24, 2011)

-The Company announced that it will invest more than 6 million euros in the construction of a new production line in the existing electronics plant in Kaluga, Russia. The plant will largely produce engine control units but will also manufacture components for use in fuel supply and injection systems. The aim is that this should expand production capacity to at least one million engine control units annually. More than 120 jobs will be created in Kaluga. The local company, which has so far traded under the name of 'AVTEL', will be renamed Continental Automotive Systems Rus. on July 5, 2011. (From a press release on July 5, 2011)

-The Company announced that it is investing in growth by building a new passenger tyre plant in Kaluga, Russia. Start of construction is planned for the end of 2011. Some 220 million euros will be invested in the new plant, with production slated to start at the end of 2013. Employees at the plant which will have an output of about four million tyres a year in its first full-capacity phase, are expected to number about 400 by the end of 2013. At the new plant, Continental will primarily make summer and winter tyres under the Continental, Gislaved, Barum and Matador. (From a press release on July 1, 2011)