Continental's Powertrain division is to invest around EUR20m (US$25.7m) in its Russian plant of Kaluga, expanding capacity to produce engine control and fuel supply units.

"The Russian vehicle market is one of the fastest-growing markets in the world," said Continental board member and Powertrain head, Jose Avila.

"This is why Continental is also set on expanding its operations here and intends to position itself as the world's leading supplier of electronics."

The production facilities - due to start next February - at the new plant are designed for an annual output of up to 1m engine control units with the aim to satisfy growing demand for electronically controlled engine systems.

Once the new plant is in operation, Continental Powertrain plans to have created around 100 new jobs by 2016. At present, the Group as a whole employs some 400 workers at the Kaluga site, of which more than 230 are in the automotive sector.

During the next few years, stricter emissions standards will significantly increase the requirement for economical, low-emission injection systems; from the start of this year, new cars must meet Euro 4 standards, while Euro 5 will apply from 2015.

"It is precisely in emerging markets, the Russian automotive market being one such market, that there will be a demand for inexpensive yet high-performance systems," said Continental Powertrain Engine Systems Business Unit head, Wolfgang Breuer.

"Our 32-bit Easy-U engine control unit is the right product to satisfy this demand. Like all the other systems and modules, the engine control units will also be manufactured to Continental's global quality standards."

The investment represents partial implementation of an agreement made with the regional government in the summer of 2011, with other elements of the agreement to follow at a cost of EUR240m, that will see Continental's Rubber Group establish a new tyre plant to open at the end of the year and which will initially allow the annual production of 4m units, creating 400 new jobs in addition to the existing 200.