The UK business, which is worth about £1 million, was previously handled by ZenithOptimedia.
Continental is stepping up its spend in the UK and other markets as part of its support of football and sponsorship of the World Cup in Germany in 2006. It has also been a Uefa Champions League sponsor.
Initiative is handling the account from Hamburg as Continental is based in Germany. Creative is developed by the German agency Change and adapted locally. Palmer Halgreaves Wallis Tomlinson has adapted work for the UK.
Initiative's UK work will focus on the Uniroyal, Continental and Semperit brands.
Jerry Hill, Initiative's chief executive, said: "Continental is a respected brand and we are looking forward to helping it implement powerful communication properties to support its UK development."