SOURCE: China Auto Logistics Inc.

China Auto Logistics Inc.

April 22, 2010 07:30 ET

China Auto Logistics Executes Memorandum of Understanding to Purchase Fast Growing Automotive Consumer Website for Approximately $7 Million in Cash and Stock

“Goodcar,” a Provider of Discount Cards for Auto-Related Products and Services, Is Adding Approximately 1200 New Customers a Week

TIANJIN, CHINA--(Marketwire - April 22, 2010) - China Auto Logistics Inc. ("the Company" or "CALI") (NASDAQ: CALI), one of China's leading automobile portals for car dealers and consumers of vehicle services and products, announced today that it has signed a Memorandum of Understanding to acquire ("goodcar") for $7 million, consisting of $2 million in cash and 1 million CALI shares. 

The "goodcar" website has become increasingly popular in China's rapidly growing automotive market, with current weekly online sales of approximately 1,200 discount cards at prices up to $57.00 each per year. Customers paying the annually renewable fee obtain a wide array of discounts on gas purchases, parking, car washes, auto maintenance and body work repairs as well as 24/7 traffic information and emergency roadside assistance. The acquisition is subject to completion by "goodcar" of a US GAAP audit and execution of a definitive agreement. It is expected to close by August 31, 2010.

Anticipated Contribution This Year

Founded in June, 2008, has since rapidly expanded to six cities in China -- having sold to date more than 40,500 discount cards in Wuhan, Xiamen, Chongqing and Beijing. In Wuhan, through an arrangement with China Petro, "goodcar" is able to offer 5% discounts on gas purchases. China Auto Logistics anticipates that if the acquisition is completed by the end of August, "goodcar" would contribute to the Company's revenues and profits this year with sales of at least 20,000 discount cards. Mr. Tong Shiping, Chairman and CEO of the Company, added, "Of course, we expect to further build the growth of 'goodcar' with new services, products and geographic expansion, in line with our plan to have a presence in 60 Chinese cities by 2012 reaching 70% of China's auto-buying population."

Mr. Shiping continued, "The acquisition of would be another exciting step forward for our Company, broadening the audiences we reach from auto buyers and dealers of imported and domestic vehicles to the growing number of new car owners in China trying to operate and maintain their vehicles as economically as possible." Mr. Tong added, "The dramatically increasing number of new drivers in China, where car ownership continues to multiply to what is still only approximately 40 persons per thousand, is a logical new focus for us with significant additional growth potential."

Description of China Auto Logistics Inc.

With 2009 sales of approximately $215 million, China Auto Logistics Inc. is one of China's top sellers of luxury imported cars as well as one of the country's leading developers of websites for buyers and sellers of imported and domestic automobiles. It is also China's leading "one stop" provider of logistical services and financing to imported car dealers nationwide. Its subscription and advertising based is the number one site for imported car dealers and consumers. Its site, focused on the domestic auto market, has climbed rapidly to become one of the top 200 sites in China. The Company believes further expansion of its new automobile portal as well as the addition of new web-based auto-related services, will drive future growth. For additional information:

Information Regarding Forward-Looking Statements

Except for historical information contained herein, the statements in this press release are forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties, which may cause our actual results in future periods to differ materially from forecasted results. These risks and uncertainties include, among other things, product demand, market competition, and risks inherent in our operations. These and other risks are described in our filings with the U.S. Securities and Exchange Commission.

Contact Information

  • Contacts:

    US Investors
    Focus Asia Partners
    Robert Agriogianis
    Tel: 973-845-6642
    Ken Donenfeld
    Tel: 212-425-5700
    Fax: 646-381-9727