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AutoChina International Provides Update on Operations and Outstanding Matters, Closes on New $10.1 Million Credit Facility


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SHIJIAZHUANG, China—July 15, 2011: AutoChina International Limited (“AutoChina” or the “Company”) , China’s largest commercial vehicle sales, servicing, leasing, and support network, today announced that the Company leased 3,446 commercial vehicles in the second quarter of 2011, compared to 4,130 in the second quarter of 2010. Since launching its commercial vehicle sales and leasing business in March 2008, the Company has leased over 27,000 trucks.

“We continue to work closely with all appropriate parties on this potential restatement, which focuses on the Earn-out and is not expected to negatively affect AutoChina’s operations. We will keep our existing shareholders, analysts, and potential investors apprised of our progress in filing our Form 20-F.”

During the second quarter of 2011, the Company opened 36 new commercial vehicle financing and service centers in the Anhui, Fujian, Gansu, Guangdong, Guizhou, Henan, Hubei, Hunan, Jiangsu, Jiangxi, Liaoning, Shanxi, Sichuan, and Zhejiang provinces, and the Inner Mongolia autonomous region. As of June 30, 2011, the Company operated 354 commercial vehicle financing and service centers, compared to 193 as of June 30, 2010.

Company Closes on New Credit Facility

The Company also announced that it recently closed on a new credit facility from existing lender CITIC Bank, a wholly owned subsidiary of China International Trust and Investment Corporation (“CITIC”). The facility provides AutoChina with access to additional lending totaling up to RMB65 million (approximately $10.1 million).

Mr. Yong Hui Li, Chairman and Chief Executive Officer, commented, “We are pleased to continue our partnership with CITIC with this new credit facility, which will provide us with funding to further expand the Company’s commercial truck leasing business. We have worked with CITIC since September 2009 and feel that our ongoing association with the firm is a testament to the strength and integrity of AutoChina’s business and management team. We have also been very pleased with the results of the pioneering securitization program through CITIC that we announced last year, which provides us with an additional source of funding. We expect to continue leveraging our partnerships and our expanding geographic footprint to continue distinguishing ourselves from our competitors, who are generally much smaller in size. We believe that we have built a strong foundation that can serve as a platform for long-term growth.”

Update on Potential Restatement

As announced on June 30, 2011, AutoChina is appealing the OCA’s decision that the Earn-out Provision, which was part of its initial business combination in 2009, be treated as a derivative financial instrument. The appeals process is ongoing and has not yet concluded.

The Company believes it is appropriate to wait until the appeals process has concluded before filing its audited financial results for the year ended December 31, 2010. AutoChina is working closely with its advisors, legal counsel, PricewaterhouseCoopers Zhong Tian CPAs Limited Company, and Crowe Horwath LLP to expeditiously resolve the appeals process and to prepare the necessary documents should the Company be required to restate its previously reported financial statements.

Mr. Li concluded, “We continue to work closely with all appropriate parties on this potential restatement, which focuses on the Earn-out and is not expected to negatively affect AutoChina’s operations. We will keep our existing shareholders, analysts, and potential investors apprised of our progress in filing our Form 20-F.”

Update on SEC Investigation

As announced on June 30, 2011, the Company is being investigated by the SEC. This investigation began independently of the Company voluntarily bringing any accounting matters to the attention of the OCA, and the OCA process did not trigger the SEC investigation. The SEC has informed AutoChina that the investigation is a non-public, fact finding inquiry and does not mean that the SEC has concluded that AutoChina has committed any wrongdoing.

AutoChina voluntarily disclosed the existence of the SEC inquiry on June 30, 2011. The Company continues to fully cooperate with SEC staff regarding their investigation.

About AutoChina International Limited:

AutoChina International Limited is China’s largest commercial vehicle sales, servicing, leasing, and support network. AutoChina’s operating subsidiary was founded in 2005 by nationally recognized Chairman and CEO, Yong Hui Li. The Company owns and operates 354 commercial vehicle financing centers across China and primarily provides sales-type leasing and support services for local customers.