Announcement by leading Chinese auto manufacturer and global automotive systems and components provider will lay solid foundation for Chery’s international strategy

　　Beijing, November 20, 2006 － At the 9th Beijing International Automobile Exhibition (AutoChina 2006) , Chery Automobile Co., Ltd. announced that Chery and Johnson Controls will open a joint venture for automotive systems and components manufacturing under the name of Johnson Wuhu Automotive Interiors Co., Ltd.

　　According to Chery International, the joint venture will be established by Wuhu Chery Technologies Co., Ltd., a subsidiary of Chery Automobile Co., Ltd,. and Johnson Controls Automotive Experience business. Both parties will own a 50% share of the joint venture. The manufacturing base and the administration and operations center of the joint venture will be built in Wuhu, Eastern China’s Anhui province, where Chery Automobile is headquartered. The administration team will comprise managers from Johnson Controls and Chery Automobile.

　　Chery, the reference for Chinese automobiles, now holds a 60% stake of China’s auto export market, and has recently closed several big contracts with a number of international brands, partnering with DaimlerChrysler to produce subcompact cars and supplying 100,000 gasoline engines a year to Italy’s Fiat Auto. Now, with the announcement of its joint venture with Johnson Controls, the first to be made in China with an automotive components manufacturer, Chery is accelerating the pace to become an international player.

　　“This cooperation will help Chery Automobile to perfect and standardize the components supply system, and will give Chery Automobile international competitive advantage in the vehicle market as a whole. More importantly, this is the recognition by a Fortune Global 500 company of Chery’s brand, strength and future development potential,” said Mr. Yin Tongyao, Chairman and CEO of Chery Automobile.

　　The prime mover in promoting the transformation of the perception of Chinese automobiles from being “status symbols” to “means of transportation”, Chery has established itself as safer, more energy efficient, more environmentally-friendly, with R&D capability, 10 new models every year and sales growth of over 130% per annum, in home and overseas markets.

　　Mr. Eric Mitchell, vice-president and general manager of Johnson Controls’ Automotive Experience business in China, commented on the significance of the joint venture with Chery Automobile. He said: “This joint venture launches our strategic cooperation with Chery Automobile in China, which will greatly benefit both sides by allowing us to provide high-quality, innovative and integrated interior systems at competitive cost.”

　　He continued to say: “In the past 10 years, Johnson Controls has been fortunate to become one of the major automotive suppliers in China. Likewise, Chery has grown to become a market leader in China’s automotive market over that same time. We feel that our successes to date provide a solid foundation for a successful joint venture together.”

　　Mr. Yin Tongyao said: “We have a comprehensive strategic cooperation with Johnson Controls instead of a simple relationship for the supply of components. We will fully absorb the advanced automotive expertise and technical experience of Johnson Controls to help Chery become the best car in the world.”