"The perspectives for the industry as shown at the IAA 2007 clearly confirm our view that the prevailing topics in the years to come will be safety, climate protection, and infotainment. With the consolidated innovative prowess and the extensive product portfolio of Continental and Siemens VDO, we feel we are excellently positioned as a systems specialist," said Manfred Wennemer, chairman of the Continental executive board, at the International Motor Show in Frankfurt/Main.
Parallel to the ongoing antitrust authorities approval process (a decision is expected by the end of the year), Continental is making intensive preparations for the integration of Siemens VDO. "Antitrust regulations do set rather tight restrictions for us until closing, but within this legal framework, we are reacting quickly and precisely. For instance, we have determined the future corporate structures, which provide for three divisions: Chassis and Safety, Powertrain, and Interior in place of the current Automotive Systems division, in addition to the two tyre divisions and ContiTech," said Wennemer.
"At the same time, we are working on implementing the financing firmly agreed upon with the banks for a volume of 13.5 billion euros, and we assume that a consortium will have been formed by early October. In addition to an 11 billion euro fixed loan, the banks are granting a revolving credit line of 2.5 billion euros, which ensures us sufficient latitude to manoeuvre," Wennemer explained. He pointed out that the company is expecting a cash flow of more than one billion euros starting in 2009, stressing that Siemens VDO will make a positive contribution to earnings already in 2008 – before integration and restructuring cost, depreciation and amortization.
Karl-Thomas Neumann, executive board member responsible for the Automotive Systems division and technological development, stressed the role of Continental as integrated systems supplier: "We will be able to generate a huge driving force for customer-oriented innovations, especially in the mega-trends areas of safety, reduction of CO2 emissions and infotainment. The technology exhibited at the IAA underscores the market opportunity for environmentally-friendly powertrain systems that address market demand for emission reductions and fuel economy improvements…"
Neumann also pointed out that the demand for affordable cars will experience double-digit growth worldwide in the next few years. "We will be dealing more intensively with the ‘low-cost’ car segment in markets such as China, India and Brazil. We refer to them as affordable cars, as that better represents the needs we are addressing…’Low-cost’ should not be interpreted to mean ‘low-tech’ or ‘inadequate safety’ on the contrary!"
