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2017 Annual Report

Solutions for Clean Air.

2017 Annual Report

Continental Corporation - 2017 Annual Report

Research and Development

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Our core topics are automated driving, electric mobility, connectivity, digitalization and urbanization.

Continental stands for mobility, which we are creating and shaping with our ideas and solutions for our customers in various industries. Activities in the area of research and development (R&D) therefore have a high level of strategic relevance. At the same time, we keep our social responsibility in mind, which is why all future issues and research activities are also considered and defined in terms of being safe, clean and intelligent.

When developing our products, systems, solutions and services, we systematically implement a corporation-wide technology strategy based on our core topics: automated driving, electric mobility, connectivity, digitalization and increasing urbanization.

The management body responsible for adapting and evolving the long-term technology strategy is the Executive Board. At the Executive Board technology review meetings – which are held regularly several times each fiscal year – the Executive Board follows, manages and monitors Continental’s technology portfolio.

Below the Executive Board, the corporate technology officer (CTO) is responsible for coordinating R&D activities, and is the central point of contact for strategic questions on future technology, innovation and business opportunities. The CTO further strengthens our technology leadership by ensuring, among other things, the ongoing planning of the medium- to long-term activities of the technology strategy, technology scouting, technology reviews, and the constant expansion of our research network.

R&D center in Silicon Valley opened
Our global technology network was expanded in April 2017 with the opening of a research center in San José, Silicon Valley, California, U.S.A., where up to 300 experts from various operational and strategic areas of Continental are to work on the mobility of the future. The focus is on projects related to automated driving, electric mobility, connectivity and mobility services.

Software-based solutions play a significant role in these areas, along with the processing of large amounts of data and using artificial intelligence. At the same time, the center provides a direct interface with our customers and with startups in California, U.S.A. The 6,000-square-meter research center comprises cutting-edge laboratories, workshops and offices.

Continental has been represented in Silicon Valley for many years. The Intelligent Transportation Systems (ITS) business unit has been based there since 2014. All areas of Continental cooperate in an interdisciplinary and collaborative manner in San José.

Further expansion of international research network
We continued expanding our international research network internally and externally in the year under review, in order to benefit from continually sharing knowledge. For example, we agreed a strategic cooperation with Baidu, one of China’s largest internet companies, for the further development of intelligent mobility. Continental and Baidu will expand their technology exchange by each taking advantage of their respective benefits in automotive electronics and internet technologies, as well as forming a strong technological alliance. Through the use of complementary resources and technological expertise, both partners aim to develop technologies, products, and business models to provide comprehensive and reliable solutions for automated driving, connected cars and intelligent mobility services.

Research and development expenses (net)
  2017 2016
  € millions % of sales € millions % of sales
Chassis & Safety 913.8 9.4 773.4 8.6
Powertrain 699.0 9.1 701.5 9.6
Interior 1,062.7 11.4 956.0 11.5
Tires 289.8 2.6 260.9 2.4
ContiTech 138.4 2.2 119.7 2.2
Continental Corporation 3,103.7 7.1 2,811.5 6.9
Capitalization of research and development expenses 92.1 105.9
in % of research and development expenses 2.9 3.6
Depreciation on research and development expenses 74.5 54.3
Download table overview (MS-Excel)

Under the agreement, Continental and Baidu will join together to focus on areas such as sensor technology and software for advanced driver assistance systems and automated driving. In addition, they will work on applications for Baidu’s Apollo platform (platform for the development of automated vehicles) – including artificial intelligence and data security – as well as road tests, data acquisition, and analysis for automated driving. Since 2017, Continental has been represented on the Apollo platform’s board of directors by the Chassis & Safety division. We supply hardware and software components to create a platform that will enable safe autonomous driving for everybody.

Artificial intelligence
Artificial intelligence (AI) was one of the other core topics in R&D in the year under review. This is the term for a technological revolution that will change the world in countless ways. AI has already reached an important milestone thanks to more data, better algorithms and faster, more affordable computers. In the future, AI is expected to be used as universally as software is today. We are examining and testing the areas in which we can apply AI methods – in the company and for our customers. AI will have a further influence in the automotive industry. We want to make personal mobility easier by creating new AI-compatible products and services, from automated driving systems to digital mobility assistants, from multitransport travel planning to predictive maintenance. We use efficient and effective algorithms for this purpose. Continental is working closely with top universities and research institutes around the world. At the same time, we are strengthening our in-house expertise to integrate these algorithms into our products, services and processes.

BEE – for personal mobility in urban traffic
We are using the CUbE (“Continental Urban mobility Experience”) test vehicle to investigate and test driverless passenger transportation in Frankfurt. This kind of vehicle, also known as a driverless taxi, will play a crucial role as an addition to public transport in the future.

We developed a visionary and trendsetting concept for personal mobility in 2017, which was presented at the International Motor Show (IAA) in Frankfurt. It is called BEE (“Balanced Economy and Ecology mobility concept”) and is part of a comprehensive personal mobility solution in urban spaces. BEE is an electric vehicle designed for stress-free, convenient and comfortable rides in cities. The vehicle is intended for people of all ages and can adapt itself to the passengers’ needs. You can call BEE to your location via an app. Continental’s mobility concept envisages just a few minutes between the online order and its arrival. BEE can also be used to efficiently transport small volumes of goods. It is also conceivable that many BEEs will one day form a swarm of autonomous vehicles of various sizes and models.

The development of BEE was influenced by the experience and inventiveness of our employees worldwide. They are familiar with the challenges and requirements of future urban environments and know how they want to be mobile in the future. Our employees contributed ideas as to what unconventional and original solutions to upcoming transport and mobility needs might look like.

R&D expenses (net) € millions / R&D ratio %

R&D expenses (net) € millions
R&D ratio %

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