22nd February 2006 - Continental AG Establishes New Brake Calipers Plant in Zvolen, Slovak Republic

To supply customers in the growing Eastern European economic region

Production plant in the Slovak Republic creates proximity to customers, lowers logistics costs strengthens the competitiveness of Continental Automotive Systems.

Only ten months after the groundbreaking in April 2005, the Automotive Systems Division of Continental AG has dedicated a new production plant for brake calipers in Zvolen, Slovak Republic. In the future, the plant will produce high-performance brake calipers, some of which will be supplied to automotive plants in the fast growing Automotive Region Eastern Europe (AREE). Continental Automotive Systems plans to invest more than EUR 60 million in the Hydraulic Brake Systems Business Unit, which plays a significant role in securing its international competitiveness. Plans are for the Zvolen plant to be expanded to become one of Continental Automotive Systems’ largest brake caliper production and assembly

Participating in the dedication ceremony for the new brake plant on February 3, 2006 were Mikulas Dzurinda, Prime Minister of the Slovak Republic; Jirko Malcharek, Deputy Prime Minister and Minister for Economy; Ivan Miklos, Minister for Finance of the Slovak Republic; Vladimir Manka, Member of the European Parliament and former Mayor of Zvolen; Miroslav Kusein, Manka’s successor; Dr. Karl-Thomas Neumann, CEO of Continental Automotive Systems and Member of the Executive Board of Continental AG; and Heinz Zingel, Manager of the Hydraulic Brake Systems Business Unit.

Fast construction: from groundbreaking to the first brake component in seven months

“The city of Zvolen is optimally located geographically and offers an excellent infrastructure with motorway and rail access. Moreover, we are able to find highly qualified employees here not only for production but also for development,” were the reasons named by Heinz Zingel for deciding to construct the long-planned Hydraulic Brake Systems plant in Zvolen. In late August 2005, the first building complex was already under roof; the first production machines were set up in early October, said Zingel in looking back at the work started in early April. During that time, more than 30,000 cubic meters of topsoil were moved; more than 1000 tons of steel and 15,000 cubic meters of concrete were used in the construction to create a total production area of 16,000 square meters. The first brake components were produced as early as November 8, 2005, less than seven months after the groundbreaking. Today, the new production site already employs 70 persons.

Zvolen: the fifth location in the rapidly growing Eastern European economic area

Dr. Karl-Thomas Neumann sees great strategic significance in Zvolen. “This plant strengthens our presence in the rapidly growing Eastern European economic area,” he said. “Our customers, the automobile manufacturers, have built up production capacity for three million vehicles per year and they are planning additional plants. The Zvolen plant is favorably positioned in proximity to many existing and planned production facilities and thus reduces logistics expenses for use and our customers.” This provides Continental Automotive Systems the best opportunities for participating in the upswing of the Automotive Region East Europe. Continental Automotive Systems recognized the dynamic growth of Eastern Europe early and successfully took it into account, explained Dr. Neumann, referring to the development and production locations in Sibiu (Romania), Jicin (Czech Republic) and Veszprém and Budapest (Hungary). With Zvolen as the fifth location in this economic area, Continental Automotive Systems is very well positioned for the challenges of the future and will consequently be able to secure additional locations in other countries.

The Continental Corporation is a leading supplier of brake systems, chassis components, vehicle electronics, tires and technical elastomers. In 2004, the corporation realized sales of € 12.6 billion. At present, it has a worldwide workforce of more than 81,000.

As a worldwide leading technology partner to the automotive industry, the Automotive Systems division of Continental AG integrates extensive know-how in the fields of driving safety, powertrain and comfort. In 2004, the division achieved sales of approx. € 5 billion with a workforce of more than 22,500. Automotive Systems incorporates Continental Teves and Continental Temic. Continental Teves develops and produces electronic and hydraulic brake, stability and chassis control systems, as well as electronic air spring systems and sensors. Continental Temic is a specialist in chassis electronics, engine management and transmission control units, as well as electric drives and comfort electronics.

Source: Continental AG Press Release