MUNICH, Germany — Automotive supplier Continental AG Tuesday (July 10) announced to establish an R&D center in Shanghai, China. With the move, the company underscores its growth strategy in future markets.

The scope of the center will include selected automotive electronics topics as well as automotive mechanics and tires. The center is scheduled to become active early in 2009. Initially, it will offer 450 jobs with an option to add another 150 jobs through 2011. The investment has a volume of €48 million (about $65 million).

In the center, Continental plans to establish it's Asian headquarters for the company's Automotive Systems, ContiTech and Tire divisions. In addition, the company plans to move its test centers for selected product lines to Shanghai. The Shanghai center will also be involved in design and test for powertrain, hydraulic and electronic brakes, safety systems and electronic driver authorization.

"China plays an increasing role in the development of the global automotive industry", explained Karl-Thomas Neumann, CEO of Continental's Automotive Systems division. "Establishing an R&D center in Shanghai is an important strategic step towards our target of becoming a leading automotive supplier in China."

The company intends to double its sales volume in Asia by 2010. In 2006, the entire company achieved sales of €14.9 billion. It remained unclear to which extend Asian sales contributed to that volume.

The move underscores Continental's growth strategy. The company is in a fierce competition situation with automotive supplier Bosch group which in 2006 achieved sales of about €26 billion in its automotive division. In order to get at eye level with Bosch, Continental presently bids openly for Siemens' automotive division VDO. According to reports, Continental is ready to invest more than €10 billion. So far however, Siemens seems to be unimpressed; the group instead is preparing for an IPO of its automotive business in early fall.