As automotive sales in China continue to surpass expectations, global supplier Continental AG is further building its capacities here with a new electronics engineering center and Asia headquarters.

The new facility in Shanghai's Yangpu district is a 16 floor building with a total office space of 15,000 square meters. Staff numbers are currently over 700 and by mid 2010 will be 900.

Earlier this year, Continental opened a chassis and powertrain r&d center in Shanghai's Jiading district. Total investment in both centers is 60 million Euros (609 million yuan), according to the company.

"We are intensifying our localization strategy to develop specific products and solutions for the Asian and Chinese markets with focus on 'affordable cars'," said Jay Kunkel, Asia president of Continental.

"We estimate that a minimum of 25% of our global sales will be achieved in Asia by 2013," he added.

By 2014, 40 percent of global car production will take place in Asia, according to Helmut Matschi, member of the executive board of Continental AG speaking at the opening of the new headquarters in Shanghai.

"We see 4 mega trends that Continental is fully committed to," said Matschi. These are; environment, safety, information and affordable cars, he says.

Matschi said besides developing countries, mature markets in the West are showing strong interest in affordable cars.

Technology and solutions developed in Asia for local markets will therefore also be used in mature markets.

"We see very high interest in affordable cars in the Western hemisphere," says Matschi.