04 April 2013

Continental to invest €20 million in new Powertrain plant in Kaluga, Russia

- Actual production scheduled to start in February 2014 
- Around 100 new jobs will be created by 2016 

Kaluga/Regensburg - 04 April 2013 - Continental is pursuing its growth strategy in Russia with an investment of around €20 million new Powertrain plant in Kaluga. The foundation stone for the new plant was laid today in the presence of the governor of Kaluga region. This investment will significantly expand Continental's capacity to produce engine control and fuel supply units. 

"The Russian vehicle market is one of the fastest-growing markets in the world. This is why Continental is also set on expanding its operations here and intends to position itself as the world's leading supplier of electronics," said José Avila, head of the Powertrain Division and member of the Continental AG Executive Board. 

The state-of-the-art production facilities at the new plant, constructed to Continental's standards, are designed for an annual output of up to a million engine control units. The aim is to satisfy the growing demand for electronically controlled engine systems that offer both high performance and economy. Around €20 million will be invested in land, buildings, plant and equipment. The design allows for an effective production area of some 7,200 square meters and will be finished by the middle of the year. Actual production is scheduled to start in February 2014. Once the new plant is in operation, Continental Powertrain plans to have created around 100 new jobs by 2016. At present, the Group as a whole employs some 400 workers at the Kaluga site, of which over 230 are employed in the automotive sector. 

Over the next few years, stricter emissions standards will significantly increase the requirement for economical, low-emission injection systems; from the start of this year, new cars must meet the Euro 4 standard. Euro 5 will apply from 2015. "It is precisely in emerging markets, the Russian automotive market being one such market, that there will be a demand for inexpensive yet high-performance systems. Our innovative 32-bit Easy-U engine control unit is exactly the right product to satisfy this demand", explained Wolfgang Breuer, head of the Engine Systems Business Unit at Continental Powertrain. The production lines are highly flexible allowing them to be rapidly adapted to meet new customer requirements. 

Even though Russia has now joined the WTO, the country's automotive market will continue to be closely regulated until the end of the decade. In order to avoid high import duties, international vehicle manufacturers are increasingly concentrating their vehicle production within Russia. Following this trend, Continental is also expanding its in-country presence." The 'Kaluga South' industrial park is located in the immediate vicinity of Volkswagen's, Volvo Truck's and PSA's assembly plants. 

This investment represents partial implementation of an agreement made with the regional government in the summer of 2011. Other elements of the agreement will follow; at a cost of €240 million, Continental's Rubber Group is establishing a new tire plant which will open at the end of the year and which will initially allow the annual production of four million tires. 400 new jobs will be created in addition to the existing 200. ContiTech is constructing a plant costing over ten million to produce components for air conditioning systems and power steering units. Production startup here is also planned for the end of the year. By 2015, it will employ a further 160 workers. 

Source: Continental