Continental sees fast-growing Chinese demand for stability control
Continental AG, a global supplier of brakes, electronics and engine components, has aggressive plans to expand its chassis operations in China.
In four or five years, Continental AG expects that it will get 20 percent of its global chassis sales in China, up from 15 percent today, said Ralph Cramer, chief of Continental's chassis and safety division.
"It's a pretty realistic business case," Cramer said during a luncheon interview on the eve of the Frankfurt auto show. "We see a risk that China's economy may overheat a little, but it will still grow," Cramer said.
Cramer expects strong demand in China for antilock brakes, stability control and other safety features. Sixty percent of vehicles built in China have antilock brakes, Cramer said. Less than 15 percent of vehicles produced in China have stability control, but Cramer expects that to double to 30 percent within a few years.
"The Chinese don't want to wait ten to twenty years for new technology," Cramer remarked.
With a 35 percent share of the Chinese market for antilock brakes and stability control, Continental already is a player in China. The company's chassis division has four plants in China, and 300 engineers.
Last fall, the Shanghai-based division announced a new 51-49 joint venture with Chinese supplier Huayu Automotive Systems Components to produce hydraulic brakes for automakers in China.
The partnership, called Continental Brake Systems (Shanghai) Co., will use two factories in Shanghai and Changshu to produce calipers, drum brakes, hoses, electronic parking brakes and vacuum pumps. Huayu Automotive is partly owned by Shanghai Automotive Industry Corp.
Continental's Chassis and safety division generated global sales in 2009 of $6 billion (40 billion yuan).