Christoph Hammerschmidt Courtesy of EE Times Europe (07/14/2008 10:42 AM EST)

MUNICH, Germany — Automotive parts supplier Continental AG has launched an electronic parts manufacturing site and an R&D center in Electronic City near Bangalore (India). The move reflects the significance of the Indian market for future automotive developments, the company said.

Continental has invested 2.2 billion INR (about $51 million) for the new site where it plans to develop and produce electronic components for chassis & safety applications as well as for power train and interior. The product spectrum includes dashboard instrument clusters for passenger cars, commercial vehicles and two-wheelers, immobilizer systems, motor management systems for diesel and gasoline engines, power steering controllers and comfort electronics components.

Continental Asia president Jay Kunkel said the company expects that beginning with the year 2012 almost 50 percent of the world's automotive production will take place in Asia, in particular in China and India. In addition, the company sees demand exploding for so called affordable cars which represents the lowest price category in today's automotive universe. Despite being "affordable", these cars will sport significant electronics content — not least because legal requirements will force the manufacturers to drastically reduce the engines' emissions.

For the Indian market, Continental expects an annual growth of about 15 percent for the next several years.

In the new facilities Continental plans to employ about 400 engineers and technicians as well as the same number of manufacturing workers.

Back home in Germany, in the meantime speculations run wild about a possible takeover attempt from privately owned Schaeffler group against Continental AG. If successful, the move could create the world's fourth largest automotive parts supplier. Continental acknowledged that there are talks between the two companies covering the merger topic.

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