Conti expanding Russian automotive business
Just days after announcing plans to erect a greenfield tyre plant in Kaluga, Russia, Continental has revealed plans to expand production facilities at its automotive electronics plant there. The signing of an investment agreement between Continental and the governor of the Kaluga on July 5 coincided with the renaming of its local operation from AVTEL to Continental Automotive Systems Rus. Conti’s existing operation in Kaluga will be upgraded at a cost of more than 6 million euros. This investment will crate more than 120 new jobs cover the cost of a new production line; in addition to engine control units, which will account for the majority of production, the Kaluga site will also manufacture components for use in fuel supply and injection systems.
Discussing Continental’s ambitions in Russia, José Avila, head of the company’s Powertrain Division and member of the Continental AG Executive Board, stated “our aim is to be the leading international supplier of electronics in this vehicle market.” Russia’s vehicle market is said to be one of the fastest-growing such markets in the world. At present about 230 in every 1,000 Russians own a car, however this figure is expected to increase by over 50 per cent to 375 in every 1,000 by the end of the decade.
“We’re expecting sales of new cars to reach 3.5 million by 2015 and as high as 3.75 million by 2020,” elaborated Christian Kögl, head of Continental Powertrain Russia and CEO of Continental Automotive Systems Rus. “With annual growth rates of 12 to 16 per cent, the Russian market is one of the strongest in the world.” The growth of Russia’s vehicle industry is being supported by national and regional tax incentives aimed at encouraging foreign vehicle manufacturers and suppliers to set up sites within the country. Several European high-volume manufacturers are said to be in the planning stage for new vehicle plants in the Kaluga region; to qualify for the said incentives, they must be capable of producing at least 300,000 to 350,000 vehicles with 60 per cent or more of the components used produced locally.
The goal at Kaluga is to expand production capacity to at least one million engine control units per annum. “There is an increasing demand in the emerging markets for high-performance and economical electronically controlled engine systems. Tighter emissions requirements are partly behind this increased demand,” commented Gerhard Böhm, head of the Engine Systems Business Unit within Continental’s Powertrain Division. These efficient and inexpensive systems produced for automotive growth markets were developed using knowledge gained in established automotive markets. “At the heart of the technology which we will be producing at the site in future is our innovative 32-bit Easy-U engine control unit,” Böhm continued. The control unit module is extendable and can, therefore, be flexibly adapted to the relevant vehicle architecture by means of software upgrades.
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