The Auto Channel
The Largest Independent Automotive Research Resource
The Largest Independent Automotive Research Resource
Official Website of the New Car Buyer

SORL Auto Parts Provides Business Update


PHOTO (select to view enlarged photo)

ZHEJIANG, China, January 13, 2009: SORL Auto Parts, Inc. , a leading manufacturer and distributor of commercial vehicle air brake valves and other auto parts in China, today provided a business update and commented on the outlook for 2009.

Worldwide economic conditions have caused a slowdown in the automotive industry. While the weakness in global automotive production has negatively impacted SORL's OEM business, the impact on its domestic and international aftermarket segments has remained limited due to the relatively stable demand for aftermarket products.

Historically, the fiscal third quarter has been SORL's strongest quarter. However, as discussed last year, SORL's sales grew at a slower pace in the third quarter of 2008 than in the two prior quarters, as a result of shifts in production schedules at its OEM customers.

Growth in SORL's domestic and international aftermarket segments remains healthy. In the fourth quarter of 2008, the UAE remained the Company's top export market, followed by the U.S. The Company expects that in 2009, the U.S. and the UAE will remain its top export markets for aftermarket products. Though the Company believes that uncertainty in the auto industry will continue into the second quarter of 2009, SORL also believes that it will be able to achieve stable overall growth in 2009.

The Company continues to focus closely on its cash management. It adopted higher standards for accepting customers and has cut back on customers that pose greater credit risk, to help assure a healthy cash flow. In addition, the Company believes it has sufficient liquidity including internally- generated cash flow and an untapped credit line of more than RMB150 million to maintain its growth.

Xiaoping Zhang, SORL Auto Parts' CEO and Chairman, said, "Despite tumultuous economic conditions, SORL remains strong financially and operationally. Amid an overall slowdown of vehicle consumption, our stable and diversified customer base, of which one-third is in the domestic OEM market and the remaining in the domestic and international aftermarket segments, allows us to continue to increase sales in difficult market conditions."

Mr. Zhang continued, "In 2009, we will focus on managing risk and enhancing our profitability. We believe that beginning in the second quarter of 2009, we will see a gradual recovery in the commercial vehicle market partly resulting from the Chinese government's RMB 4 trillion fiscal stimulus package to boost the economy and enhance domestic demand."