Continental AG has achieved cost savings by redesigning its hydraulic brakes made in China. That in turn has enabled it to lower the prices of these products and sell them to Chinese automakers.
In China, Continental's hydraulic brake customers are mainly joint ventures of international automakers, according to sources with Continental Automotive Systems (Shanghai) Co.

Earlier this year, Continental started mass producing hydraulic brake calipers and actuations redesigned by its r&d team in Shanghai.

The redesign has resulted in cost reduction of roughly 15 percent, says Surong Wu, manager of hydraulic brake systems at Continental Automotive Systems (Shanghai).

Supported by lower production costs, Continental reduced the price of its brake systems. But Wu doesn't say how much his company has cut the price.

The move quickly started bringing in Chinese customers for the company.

Continental has won a contract to supply the redesigned calipers and 10-inch actuations to a compact car to be assembled by a domestic automaker, says Wu.

Wu declines to name this automaker, but says the automaker plans to build 80,000 units of the compact car a year.

Production of the calipers and actuations will begin in the second quarter of 2009 in Shanghai Automotive Brake Systems Co., a 50-50 joint venture between Shanghai Automotive Co. and Continental.

International companies such as Continental, TRW Automotive Inc. and Robert Bosch AG are dominant suppliers of hydraulic brake systems in China, but domestic automakers mainly source the systems from domestic suppliers, says Gu Yifan, secretary general of China Association of Automobile Manufacturers' brake division

But now international suppliers are cutting prices of their products to attract domestic automakers, he adds.

By cutting the price of its hydraulic brakes, Continental has also won more business from global automakers operating in and outside China.

After exporting 10-inch actuations to Fiat's plant in India earlier this year, Shanghai Automotive Brake Systems has landed a contract to supply 9-inch actuations to a compact car to be made by an international automaker's joint venture in China.

Meanwhile, Continental's facility in Jiangsu province, Continental Automotive Systems Changshu Co., will provide actuations to an automaker in Japan, according to Wu.

She declines to name these companies.

Continental makes hydraulic as well as electric brake systems and components ranging from ABS (antilock braking system) to ESC (electronic stability control) in its facilities in Shanghai, Changshu and Changchun.

Continental claims to own 16 percent of the caliper market and 20 percent of the actuation market in China.