Prof. Dr. Christian v. Albrichsfeld. Bucuresti , 4.6.2013

1. Piata auto locala, intreinvestitii si scaderiContinental asexamplefor an investor in Romania Prof. Dr. Christian v. Albrichsfeld. Bucuresti, 4.6.2013

2. Agenda 1. Continental Worldwide 2. Continental in Romania Why Romania: Advantages and Specifics in Romania 3.

3. Continental Corporation291 Locations in 46 Countries, ~170.000 employees, end 2012 Europe Austria Belgium Denmark Finland France Germany* Greece Ireland Italy Netherlands Norway Portugal Spain Sweden Switzerland United Kingdom Czech Republic Hungary Kazakhstan Poland Romania Russia Serbia Slovakia Turkey • Since 1871 • Sales of €32.7 billion • One of top 5 automotive supplier Asia China India Indonesia Japan Malaysia Philippines Singapore South Korea Sri Lanka Taiwan Thailand North America Canada Mexico USA South America Argentina Brazil Chile Ecuador Africa Republic of South Africa Tunisia Australia Status: January 2013 *Headquarters in Hanover

4. We Shape the Megatrends in the Automotive Industry Safety, Environment, Information, Affordable cars Doing more. For safe mobility. Doing more. For clean power. Doing more. For intelligent driving. Doing more. For global mobility.

5. Continental in Romania end December 201110 locations, ~ 10,500 Employees, ~ 575 Mio € Investment 735 km Continental Automotive Headcount Sibiu Engineering Center & Electronic Manufacturing Timisoara, former SV Engineering Center & Electronic Manufacturing Iasi, former SV Engineering Center Brasov Electromechanical Manufacturing Total engineering: ~ 3,000 Total Manufacturing: ~ 2,200 Total Automotive: ~ 5,200 Tires Timisoara Division – Passenger and Light Truck Tires, Replacement and OE Slatina – Joint Venture Continental & Pirelli Production: Steelcord Sacalaz East European Tire Distribution Center Contitech Timisoara Power Transmission belts Contitech Fluid – Air Conditioning Components + New Division: Power Steering & Hydraulic Systems Carei - Contitech Phoenix Division: Coolant hoses and hose modules Nadab - Contitech Thermopol Products: Colant hoses and hose modules Total employees: ~ 10,500 Ukraine 1 Moldavia Hungary Carei 9 2 3 • Chişinau 3 Iaşi Arad 4 10 7 Sibiu 530 km Timişoara 5 8 1 Braşov 2 4 5 Slatina Bucharest BlackSea 6 6 Serbia 7 Bulgaria • 6 legal entities in 10 locations. • Continental • Top employer • Top investor • Top products & technologies • Good citizen of the community 8 9 10 * Including leased variable employees

6. Continental in Romania end December 2012,10 locations, ~ 11,850 Employees, ~ 700 Mio € Investment 735 km Continental Automotive Headcount Sibiu Engineering Center & Electronic Manufacturing Timisoara, former SV Engineering Center & Electronic Manufacturing Iasi, former SV Engineering Center Brasov Electromechanical Manufacturing Total engineering: ~ 3,500 Total Manufacturing: ~ 2,550 Total Automotive: ~ 6,050 Tires Timisoara Division – Passenger and Light Truck Tires, Replacement and OE Slatina – Joint Venture Continental & Pirelli Production: Steelcord Sacalaz East European Tire Distribution Center Contitech Timisoara Power Transmission belts Contitech Fluid – Air Conditioning Components + New Division: Power Steering & Hydraulic Systems Carei - Contitech Phoenix Division: Coolant hoses and hose modules Nadab - Contitech Thermopol Products: Colant hoses and hose modules Total employees: ~ 11,850 Ukraine 1 Moldavia Hungary Carei 9 2 3 • Chişinau 3 Iaşi Arad 4 10 7 Sibiu 530 km Timişoara 5 8 1 Braşov 2 4 5 Slatina Bucharest BlackSea 6 6 Serbia 7 Bulgaria • 6 legal entities in 10 locations. • Continental • Top employer • Top investor • Top products & technologies • Good citizen of the community 8 9 10 * Including leased variable employees

7. National visibility: Continental – Top 1 Automotive Supplier April 2013(Catalyst Survey): 4th as „most desired employer“ • 1 Oracle • 2 Google • 3 Microsoft • 4 Continental • 5 OMV Petrom • 6 IBM • 7 BCR • 8 Orange • 9 P&G • 10 Coca-Cola • 11 Vodafone • 12 BRD • 13 HP • Renault Romania • KPMG plan actual Student Survey June 2012 (ZF): 1st as „Automotive Supplier“ * all legal entities

8. Product Portfolio Continental Rubber Group Romania Plant Production Tires Division(Timisoara) ContiTech Division Power Transmission(Timisoara) ContiTech Division Fluid Technology(Timisoara + Carei + Nadab) • Passenger Tires • Light Truck Tires • V-Belts • Timing Belts • Multi-Rib Belts • Agriculture Belts • Air Conditioning - Lines • Power Steering Lines • Power Train Lines • Hoses: - Heating Cooling • - Turbocharger • - Silicon 13” – 18” tires OE & Replacement 16” – 17” tires OE & Replacement

9. Product Portfolio Continental Automotive Group Romania Plant Production Chassis & Safety (Timisoara + Sibiu) Powertrain(Brasov + Sibiu) Interior(Timisoara + Sibiu) • Passive Safety & ADAS • Chassis Components • Fuel Supply • Transmission • Instrumentation & Driver HMI • Body & Security Central Displays Airbag Control Units SPEED Platform Airbag Control Units Instrument Cluster Fuel Supply Pump Body ControlModule Electronic Parking Brakes Underhood Switching Module Electronic Parking Brakes Transmission Control Units

10. Product Portfolio Continental Automotive Group Romania Activities R&D (3500 employees in R&D) Chassis & Safety Powertrain Interior • Instrumentation & Driver HMI • Infotainment & Connectivity • Body & Security • Commercial Vehicles & • Aftermarket • Electronic Brake Systems • Passive Safety & ADAS • Chassis Components • Engine Systems • Transmission • Hybrid Electric Vehicle Instrument Cluster Head-up Display Secondary Display Electronic Hydraulic Combi Brake (EHC) Injectors ECU ECU Gasoline Engine ABS/ESC Connected Radio Multimedia System Airbag Control Unit Closing Velocity Sensor Camera Sensor Family ClipSat – Pressure Satellite DQ:200 HAP 511, 542, 728 T76 Tire Guard Wheel Unit Body Control Unit Intelligent Battery Sensor Key DC-DC ConvertorDriver for Electric Engine Battery Controller Onboard Collection Unit Air Spring Damper Steering System Force Feedback Pedal Tachograph Instrumentation & HMI

11. Continental in Romania – 12 Years of Progress and Achievement ContiTech Romania S.R.L opens the plant in Timisoara Continental Automotive Romania SRL (former Siemens VDO) starts the green field in Timisoara Continental Automotive Romania SRL (former Siemens VDO) opens a plant in Brasov Continental Automotive Romania SRL (former Siemens VDO) opens an R&D location in Iasi and a plant in Timisoara 2000 2006 2010/11 2004 2007 2001 Continental Automotive Products SRL starts the green field location in Timisoara Continental Automotive Systems SRL opens the plant in Sibiu Continental acquires Siemens VDO Automotive AG and advances to among the top five suppliers in the automotive industry worldwide, at the same time boosting its market position in Europe, North America and Asia. Thermopol Romania SRL opens the plant in Nadab ContiTech Fluid Automotive Romania SRL starts production in Carei

12. Why Romania? • Good Cost / Performance ratio • Good Qualification (University Education) • Great Language Skills (German, English, French, …) • Cultural and Geografic Proximity to Middle and Westeurope • Good support from local authorities • Flat-Tax and Subsidies for Investments • EU Legislative System • Continental found in the last 12 yearsgood Business environment for growth(export-oriented company) • However … 735 km Ukraine Satu-Mare Sathmar Ungarn Moldavien • Chişinau 1.5 hours drive until reaching the Highway Cluj Klausenburg Iaşi Arad Sibiu Hermannstadt TemeschburgTimişoara 530 km Braşov Kronstadt Ploiesti Pitesti Belgrad BlackSea Bukarest Craiova Konstanza Serbien Bulgarien

13. Foreign Direct Investments in Romania Smallest value in the Last 10 years Romania not to loose competitive advantages ! Grafik entnommen aus: AHK-Broschüre, ‘Rumänien Leistungsstarker Standort‘ 2013 Source: BNR

14. Human ResourcesEducation Level Worker • Vocational schools (scoala profesionala) not existing in practice; (education not up-to-date)(Continental started pilot classes according to New law/German model) • Educated „master craftsmen“ (Meister/mester) and technician in practice not existent • Good knowledge of foreign languages also at workers (some are university graduates of non-technical faculties) University level • High level of education, but also „volume-oriented“ • Theoretical education, more teaching of knowledge, less problem-solving competence  Need of additional trainings inside the companies

15. Human Resources Labour Market • Still competitive labour costs • Big towns are crowded with companies (e.g. Timisoara, Sibiu, Brasov, Iasi) • Difficult to find good employees • Experienced Employees to be hired from other companies  „War of Talents“ • Dynamic Labour Market with high salary increases • Difficult to retain people in competition with (North-) West-Europe (e.g. Germany)especially well educated key players • Not just salaries • Up to date Educational system • Stable and secure health/social system • Live standard in cities

16. Infrastructure / Legal / Subsidies • Infrastructure • Highways from major cities to western border still not existing (for trucks almost 1 day from Brasov to Hungarian border/ European Highway net) • Availability of office space or construction land varies locally • Legal / Tax System • Stable fiscal system required and legal certainty necessary; changes “over night” planning needs to be possible for 5 years in advance • EU-legal system (but high Bureaucracy) • Subsidies • Legislation existing and tendencies visible for improvementbut in detail the legislation creates even more bureaucracy (even more than European Fonds) instead of helping • Direct subsidies for creation of jobs and investments would help • Commitment Culture • Authorities need to keep commitments and promises (independent of party changes) • Investors currently choose the countries based on reliability

17. Quintessence • Romania is still interesting as investment country for autmotive industry • Bound in in European Union • Competitive work force existing • Important where to invest (competition with existing companies) • Implication of State and Authorities needs to be increased • Stability/Predictability of legal and tax system • Bureaucracy • Subsidies • Commitment culture • Keeping of work force by improving live quality (health, education, social system)

18. 140 Years Continental 1871 – 2011 Mulţumesc mult pentru atenţia dumneavoastra!Thank you for your attention!