Yuchai Machinery Establishes Large Casting Facility

China Yuchai International Limited, the leading manufacturer and distributor of diesel engines in China, Friday announced that its subsidiary, Guangxi Yuchai Machinery Limited Company ("GYMCL"), has begun the first construction phase of the state-of-the-art Yuchai Casting Foundry ("YCF").

This casting facility is located in the Yuchai Industrial Park Potong District with a total planned area of 1,800 acres and 6 casting production lines to be constructed, with a total investment of RMB 960 million. YCF is being established to manufacture high-quality and high-strength cylinder heads and cylinder blocks for GYMCL's wide array of diesel engines from light duty to heavy duty. Phase one of the YCF, upon completion, will include 1,000 acres and 3 casting production lines. The first casting production line is expected to be constructed and tested for trial production by December 2009, with a total engine parts production capacity for 160,000 mid-sized engines. The second and third lines will be completed for trial production by the end of 2010 and 2012, respectively.

The new YCF facility will introduce advanced Chinese domestic equipment combined with high-grade imported equipment for key procedures to achieve high efficiency, high quality, low manufacturing cost, environmentally friendly and stable production. These state-of-the-art, highly automated production lines will help shorten the manufacturing process and improve workers' productivity. More importantly, the YCF facility is designed to conserve energy during production.

YCF phase one will provide local employment for over 1,000 employees while upgrading GYMCL's product quality and lowering overall product cost. Management expects that YCF phase one, upon completion, will produce enough casting products to fuel annual growth of 15%-30% for the following few years.