Continental Group (China) Business Report FY ended Dec. 2016

Recent Development

-In December 2016, Continental’s Changchun Plant started producing intelligent battery sensors (IBSs). Currently, these sensors are the smallest and lightest IBSs in the market. The sensors are used primarily for controlling the start-stop systems and the load of the generators, and contribute to a 5 to 6% reduction in fuel consumption. (From a press release on December 16, 2016)

-In August 2016, the Continental Group's new office that had been established in Shangpu Center, Yangpu District, Shanghai was inaugurated. The new office is a four-story building that covers approximately 8,000 square meters. The building includes meeting rooms and testing laboratories to accommodate approximately 730 employees in total. The company's Tire Division has already moved to the new building. This will be followed by the relocation of the Hybrid and Electric Vehicle Components Division under the Powertrain business in the third quarter of 2016, and that of the Intelligent Traffic System Division under the Body and Electronic business in the fourth quarter. Continental's China headquarters on Dalian Road, Yangpu District, Shanghai will remain to serve as the main office for the China operations. (From news releases issued by multiple sources on August 9, 2016)

New Plant

-Huayu Continental Brake Systems (Chongqing) Co., Ltd., a new joint venture between Huayu Automotive Systems Company Limited and Continental Automotive Holding Co., Ltd., broke ground for its 84,000-square-meter-facility in the Chongqing Liang Jiang New Area. The first phase of the construction project will include a plant with a floor area of approximately 25,000 square meters. This plant is expected to be completed and begin operating in February 2017. The second phase of the project is scheduled to be completed in 2022 and will increase the plant's annual production volume to CNY 2 billion. The joint venture will produce and assemble brake systems for automakers such as Changan Ford and Great Wall Motor. (From news releases issued by multiple sources on February 24, 2016)


-ContiTech AG announced that it has signed a memorandum of understanding on a new plant in Qingdao, Shandong Province, China, mainly for automotive hoses. The company plans to invest more than EUR 20 million (approximately RMB 200 million) for the first step and to set up a greenfield with an initial floor space of approximately 15,000 square meters. In the next few years existing production of heating and cooling hose lines will be moved to the new location, which is located only a few kilometers away from the current site, and has a projected annual output of about 15 million low pressure pipes in its first full-capacity phase. Depending on market development the company intends to further expand the new plant in a timeframe of five years and is expected to be completed by 2020. Currently, ContiTech produces and sells rubber hoses and hose assemblies for the automotive industry, with more than 500 employees in downtown Qingdao, mainly for domestic car manufacturers in China and in the Asian Pacific region. (From a press release on July 19, 2016)

-Benecke-Kaliko, part of ContiTech AG, has officially opened a new plant in Changzhou, Jiangsu Province, China to manufacture its automotive interior materials Acella Eco and Acella Eco green. Series production has been running since the end of 2015 with an approximately 100 workforce; 50 more jobs are to be added over the next few months. The company has invested EUR 40 million in the first phase of the expansion. The new plant operated by Benecke Changshun Eco Trim (Changzhou) Co., Ltd. will produce around 10 million square meters of the surface material Acella Eco annually. It is mainly used for vehicle seats and arm rests. The new plant has doubled the company’s capacity for Acella in China. A second expansion phase for the new facility is planned if demand continues to rise. (From a press release on March 10, 2016)

Contract

-The Company has developed a 7-inch color TFT cluster for the SAIC Roewe RX5. The cluster has been used on the new model since September 2016. Developed locally by Continental Automotive Body Electronics System (Wuhu) Co., Ltd., the cluster is the first large instrument panel developed locally by Continental. It is equipped with a full-color LCD with a high resolution (800x480) level and high contrast ratios. The cluster is well connected to the infotainment displays and realizes interactions between three displays (smartphone, infotainment system and cluster) through the intelligent connected system developed by the SAIC Group and Alibaba. In addition, the cluster employs holistic Human Machine Interface design in which the physical gauges and the LCD are united smoothly by the virtual gauge concept, providing the driver with brand new technology experiences. (From a press release on January 11, 2017)

-The Company has developed a 4.2-inch TFT cluster for the Borgward BX7 through a corporation with Borgward. The cluster offers a high resolution (QVGA 480x727) level and high contrast ratios in a super-wide angle of view. In addition, the instrument cluster is connected with audio/video entertainment modules and realizes human machine interaction in a more convenient way. (From a press release on August 4, 2016)

Strategic Cooperation

-Continental Group (China) and China Automotive Technology & Research Center (CATARC) announced that they have signed an agreement to closely collaborate in areas including automotive security, environmental protection, and energy saving. (From news releases issued by multiple sources on January 12, 2016)

R&D Center

-As of April 2017, the Group has 17 R&D centers in China.

Major R&D Centers

R&D Center Location Business
Continental Automotive Holding Co., Ltd. Shanghai Established in 2006, operation and R&D center of Continental Group (China)
Jiading R&D center of Continental Automotive Group Shanghai Established in 2007, R&D and test for Electric Brake Systems Division and Engine System Division
Continental Automotive Systems (Shanghai) Co., Ltd. Shanghai Established in 2001, R&D Center for Electronic Brake Systems Division and Body and Security Division
Nanjing software R&D center Nanjing,
Jiangsu
Established in 2011, belong to
Automotive Electronic ID Instrument Division, engaged in
embedded software development for medium and high-end instrumentation products
Continental Heihe winter test center Heihe,
Heilongjiang
Established in 2012, conduct winter testing for electronic braking systems
ContiTech Changshu R&D center Changshu,
Jiangsu
Established in 2013, develop products for vibration control technology
Hefei R&D center of Continental Tire (China) Hefei,
Anhui
Established in 2015, develop and test tires
Continental Yancheng Testing Center

Yancheng,

Jiangsu

Estsblished 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 Chongqing R&D Center

Chongqing

The first phase project of Chongqing R&D Center started in June 2017, developed automotive electronics applications, new energy cars and industrial applications and solutions, and is expected to be put into use by the end of 2018.



-Continental AG announced that its test center Yancheng in Jiangsu Province, China has officially opened. In cooperation with China Automotive Technology & Research Center (CATARC), the test center Yancheng will mainly support the testing and validation of Continental safety products and systems, such as electronic and hydraulic brake systems, advanced driver assistance systems (ADAS) and tires. The test center Yancheng occupies 2,500 square meters in phase one. (From a press release on July 11, 2016)

-Continental Group announced that it will establish an R&D center in Chongqing, China to develop new products and solutions in the areas of in-vehicle electronics, new energy vehicles, and industrial products. The center will begin operating at the beginning of 2018, and is expected to employ 400 engineers by 2020. (From news releases issued by multiple sources on June 30, 2016)

New Product

-The Company will offer two new solutions to the Chinese market. The new products achieve improved control over evaporative emissions and meet the China VI standards. One of the modules is a leak detection system that can avoid unnoticed fuel evaporation with a high detection level of 0.5mm. The other module is an Active Purge Pump (APP) which flushes accumulated volatile organic compounds from a storage canister where these are contained during re-fueling. Since the APP purge action is completely independent of engine vacuum, the purge capability is maintained under nearly all engine-on conditions. (From a press release on October 11, 2016)