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All around the globe, the Chassis & Safety division works on the vision of accident-free driving with the

slogan “Safe and Dynamic Driving towards Vision Zero.”

Management Report Corporate Profile Annual Report 2014 Continental AG 49

growth market of Asia and international legislation regarding the use of ABS (also for motorcycles in Europe in the future), electronic stability control (ESC), and airbags are paving the way for further growth.

Forward-looking driver assistance systems are increasingly being included in the test and assessment reports that are central to receiving five stars in the Euro NCAP rating.

In all markets and regions, we see good opportunities for profit- able development with the functions of our ContiGuard® safety system. Under the heading “Safety for Everyone,” we are taking advantage of the opportunities to provide our scalable technol- ogies for all vehicle classes, on all platforms, and in all markets.

We are actively addressing issues such as environmental pro- tection and increasing electrification, for example by reducing the weight of components and developing solutions for energy recovery when braking. In the future, both aspects will be com- bined in the compact electro-hydraulic brake system MK C1.

Europe excluding Germany NAFTA Other countries Asia Germany Germany Asia Other countries NAFTA Europe excluding Germany 20% 21% 3% 30% 26% 30% 23% 4% 19% 24%

Chassis & Safety division: sales by market

Sales 2010 €5.8 billion

Sales 2014 €7.5 billion

Management Report Corporate Profile Annual Report 2014 Continental AG 50

There are two decisive factors influencing the development of drive technologies. First, active climate protection, particularly the reduction of CO2 and exhaust emissions. And second, the

increasing need for individual mobility, which results in various requirements being placed on vehicles and drive systems. In the Powertrain division, we integrate innovative and efficient system solutions for the powertrains of today and tomorrow in vehicles of all classes.

We offer our customers a comprehensive selection of products ranging from gasoline and diesel injection systems, turbo- chargers, engine management and transmission control sys- tems (including sensors and actuators), exhaust aftertreatment and fuel supply systems, and components and systems for hybrid and electric drives.

The Powertrain division operates at 88 locations in 22 coun- tries. In the year under review, its roughly 34,500 employees generated sales of €6.5 billion.

The division is divided into five business units:

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Engine Systems: The Engine Systems business unit deals with the development and production of innovative system solutions for environmentally friendly and sustainable com- bustion engines. It is dedicated to making engines more pow- erful yet more economical.

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Transmission: The Transmission business unit develops pio- neering electronic and electromechanical control units for all relevant transmission types and powertrain applications. Prod- ucts range from high-end systems to cost-optimized solutions for growth markets.

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Sensors & Actuators: Using intelligent sensor technology and actuators that interact with engine management systems, this business unit develops solutions designed to meet cur- rent and anticipated emission standards and reduce CO2

emissions in all classes of vehicle.

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Hybrid Electric Vehicle: This business unit has an extensive portfolio of powertrain electrification products. This makes it possible to implement hybrid and electric vehicles to reduce fuel consumption and thus also pollutants in various perfor- mance classes.

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Fuel & Exhaust Management: All relevant technologies for fuel management and exhaust gas aftertreatment are devel- oped and produced in this business unit. The modular design

of the components means that they can be flexibly adapted to our customers’ individual requirements and also allows for fast and cost-efficient development of tailor-made solutions with excellent functionality. The integration of exhaust special- ist Emitec into the business unit opens up the possibility of offering complete systems, too.

Our growth prospects

We anticipate further growth as a result of the following:

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The increasing global demand for vehicles with lower fuel consumption and emissions.

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A wide range of requirements placed on vehicles and drive systems as a result of the growing need for individual mobility.

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End-customer-oriented and cost-optimized drive solutions for the future of electromobility.

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Growing markets (such as China).

The importance of the vehicle drive system is increasing dra- matically due to global legislation regarding the reduction of CO2 and emissions, and the desire for individual mobility among

drivers. Our goal is to increase the efficiency of conventional combustion engines and to develop cost-efficient solutions for the electrification of the powertrain that are tailored to the needs of end customers. Energy and thermal management systems in vehicles will also play a key role here.

Growth market of electrified drive systems: In the long term, electrification will make an indispensable contribution to more efficient vehicles with lower emissions. Continental sees the solutions for the mass market in graduated hybridization, or “tailor-made electrification,” and therefore offers a technology portfolio that car manufacturers can use to hybridize existing vehicles in grades from 12 to 400 volts, with a transparent cost- benefit ratio. One of our major focal points here is the new 48 Volt Eco Drive system. The new hybrid technology can be easily integrated into the architecture of conventional-drive vehicles, yet at the same time it provides features that up to now have only been found in high-voltage hybrid systems – such as switching off of the combustion engine while driving (sailing or coasting), extremely quick and convenient premium engine start-up, and efficient braking energy recovery (recuperation).

Growth market of direct injection and turbocharging: Smaller, supercharged engines use less fuel and thus reduce CO2 emis-

sions. With our pioneering, innovative turbocharger and injector

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