Hannover/Kuala Lumpur, October 10, 2003. Continental AG, Hannover, Germany, has purchased the majority holding in the tire business of Malaysian conglomerate Sime Darby Berhad, Kuala Lumpur, enabling the international auto industry supplier to close a gap in its worldwide network of manufacturing operations and to tap the high-growth ASEAN region and Australia.

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Effective retroactively as of October 1, Continental has acquired 51 percent of a joint venture bringing together the two tire organizations DMIB Berhad and Sime Tyres International Sdn Bhd. In future the undertaking will operate as Continental Sime Tyre Sdn. Bhd. "This gives us a strong manufacturing and distribution base for a market in which over 29 million passenger tires are sold, making it more than twice as large as the Chinese market", said Manfred Wennemer, Continental's Executive Board Chairman.

Tan Sri Nik Mohamed Yaacob, Group Chief Executive of the Sime Darby Group said that the strategic alliance is a significant step forward for the Malaysian tire industry and will undoubtedly put the Sime Darby Tyre Group in the forefront of the tire technological developments and research with the new partnership having access to Continental AG's advanced tire technology and one of the top brand name in tires to emerge as a strong formidable player in the Asean and global tire markets. He added that Continental AG's investment is a positive indication of its confidence in Malaysia's economic growth and Sime Darby's strength and market position.

"We are also proud Malaysia is the first country in Asia, Continental AG has established a tire joint venture and as its export base to the Asia-Pacific region and other export markets", he concluded.

With its involvement in Malaysia, Continental - as an international auto industry supplier and the world's fourth largest tire producer - will benefit from the opening up of the regional Asiatic markets within the scope of the Asean Free Trade Area (AFTA). Coming into force on January 1, 2003, this trade agreement slackens the duty barriers that have existed so far between the Southeast Asian states.

Early on, at the end of February 2003, Continental therefore signed a contract with Sime Darby on the formation of a tire joint venture. The Malaysian multinational conglomerate reported a revenue of approximately 3.6 billion U.S. dollars for year ended 30th June 2003.

The tire factories will be run under Continental administration and are located in the north (Alor Setar) and the center (Petaling Jaya, near the capital Kuala Lumpur) of Malaysia. Boasting a current annual output of about four million passenger tires, one million light truck tires, and just under 300,000 truck tires, Continental Sime Tyre Sdn. Bhd. now ranks Malaysia's No. 1 producer of passenger tires for the original equipment and replacement busi-nesses, and occupies first place in the replacement business for commercial vehicle tires.