CONTINENTAL AG said it will spend 48 million euros (US$65 million) to build an automotive engineering center in Shanghai, part of efforts to help its automotive system division to double sales in Asia by 2010.
The auto parts research and development center, also home to its Asia headquarters, will open in early 2009 with 450 engineers before expanding to 600 by 2011, Europe's second-largest auto parts maker revealed at a signing ceremony yesterday.
Through new labs and testing facilities in Yangpu District in northeast Shanghai as well as Jiading District, its R&D capabilities will be boosted in electronics products, powertrain, chassis and hydraulic brake systems.
"By 2010, we want to double our sales in Asia," said Jay Kunkel, president of the Asia region and board member at Continental Automotive Systems, adding "CAS's growth in China will contribute significantly to the realization of this goal."
Last year, Hanover-based Continental generated sales of 14.9 billion euros worldwide while the automotive system was the biggest contributor with 60 billion euros, compared with its tire unit and ContiTech which makes rubber and plastics.
Kunkel earlier predicted CAS's sales revenue from Asian car makers will double to one billion euros by 2010.
International auto parts makers are following car makers to localize production to meet local demand in the world's second-largest auto market, where rising auto sales boost demand for car parts.
CAS also just announced plans to invest 67 million euros to build a brake-systems plant in Changshu last month.
It is the firm's fourth manufacturing plant on the Chinese mainland since its entry in the middle of 1990s.