Conti Boosts Presence in Emerging Markets through Acquisition

Continental’s Automotive Systems Division is bolstering its brakes systems capabilities in both Europe and in emerging markets, particularly Asia, through the acquisition of drum brake manufacturer Automotive Products Italia S.r.l. from the Australian Pacifica Group Limited. Based in Cairo Montenotte, in the Italian province of Savona, Automotive Products Italia employs approximately 500 people and since its establishment in 1984 has grown into a business with annual sales (2006) of 79 million euros.

This acquisition is not the beginning of relations between Automotive Products Italia and Continental Automotive Systems – the two parties have been involved in a technical and marketing cooperative agreement for the past decade. Automotive Products Italia has grown to become Europe’s second largest producer of drum brakes; approximately 5.8 million drum and park brakes were manufactured at the company’s 17,000 square metre facility in Savona last year, and counted amongst the firm’s OEM customers were major manufacturers such as Fiat, Ford, Renault/Nissan, Toyota, Land Rover, Mazda and General Motors. Upon regulatory approval the company will be integrated into the Hydraulic Brake Systems business unit of Continental Automotive Systems.

As the company focuses on high-volume drum brake production, the purchase of Automotive Products Italia will strengthen Conti’s position in the area of equipment for affordable cars, thereby reinforcing the division’s strategy of providing high-tech and cost-effective brake systems to fast growing, emerging markets, notably in Asia. “With the acquisition of Automotive Products Italia, Continental Automotive Systems will benefit from the company’s perfect market penetration in established markets and strengthen its worldwide position in drum brakes,” said Dr. Karl-Thomas Neumann, president of Continental Automotive Systems and member of the Executive Board, Continental AG. “In addition, it will help us to grow in new, emerging markets, which require drum brakes for local applications. This will be particularly important to us in China and India.”

“Automotive Products Italia complements our product offerings in the field of hydraulic brakes in a perfect way,” said Heinz Zingel, executive vice president, Hydraulic Brake Systems and member of the Management Board of Continental Automotive Systems. “As Automotive Products Italia has been a supplier to Continental Automotive Systems for many years, we already know each other extremely well and can build on a long-standing, trustful and successful relationship. The integration in terms of technology, product range and, most importantly, people, will be as smooth as one can imagine.”