Auto Parts Supplier Continental Sees China as Its Future
10 July 2008
GERMAN auto parts supplier Continental AG is considering investing in China to supply new energy vehicles to help meet more local demand and gain leadership in emerging car markets.
"We have a number of hybrid development programs with Chinese car companies. And we have also begun discussions on the possibility of electric cars in the future," said Jay K Kunkel, Asia president and member of Continental's Automotive Management Board.
"We are prepared and when we make an investment, a lot will depend on our customer's programs," he added.
The growing interest in bringing Continental's green technologies into China comes as domestic car makers like Geely and Shanghai Automotive Industry Crop race to develop energy efficient and eco-friendly vehicles, boosting the market demand for advanced technology from global car parts suppliers.
Continental, the world's second largest car parts supplier, has been developing components for hybrid drives since the mid-90s and has been mass producing a hybrid since 2003.
It has just announced it will begin mass production of a high-performance lithium-ion battery for hybrid vehicles at the end of this year. It is slated for use in the Mercedes S 400 Blue Hybrid.
China, the world's second biggest car market with over 20 percent sales growth last year, also represents an important force for Continental as it plays catch-up with Bosch, the world's biggest car parts manufacturer.
Because of the low cost of manufacturing, sourcing and labor in China, Kunkel said Continental's business growth will be boosted not only because of buoyant car sales but also because Chinese car makers, which are actively expanding abroad, are very keen for the technology and knowledge of overseas markets.
"With the target of raising China's contribution to our whole group, Continental will continue to capitalize on China which means growth in Asia and the world," Kunk added.
Hanover-based Continental has opened a factory in Changshu in east Jiangsu Province to make hydraulic braking systems.
The plant, worth US$87 million, will turn out over 5 million brake calipers and 2.4 million brake actuations every year by 2011 with more than 50 percent of its production destined for export.
Continental now has 15 manufacturing facilities and offices in China after its acquisition of Siemens VDO Automotive AG last year.
At present about 10 to 12 percent of Continental's global revenue is generated by Asia. The company wants to lift the contribution to 20 or 25 percent by 2015.
Continental has six business divisions nationwide with a total revenue of 26.4 billion euros (US$41.4 billion) last year.
Source : english.chinabuses.com
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