SOURCE: China Auto Logistics Inc.

China Auto Logistics Inc.

October 23, 2009 08:15 ET

China Auto Logistics Inc. Reports On-Line Domestic Auto Financing Service Shows Strong Early Signs of Success in Beijing; Dealer Financing Also Is Advancing

TIANJIN, CHINA--(Marketwire - October 23, 2009) - China Auto Logistics Inc. ("CALI") (NASDAQ: CALI), one of China's leading developers of websites for buyers and sellers of imported and domestic automobiles, a top seller in China of imported luxury cars, and a leading provider of auto-related services, announced today that the on-line consumer financing service offered on the Company's domestic auto website, www.at160.com, is showing strong signs of early success in the Beijing market, where it launched the service in cooperation with Shenzen Development Bank approximately two months ago.

The Company's Chairman and CEO, Mr. Tong Shiping, explained, "While at this very early stage the actual number of on-line deals and the contribution to revenues from our on-line consumer financing service is still quite small, the upward trend is obvious, from zero to nine deals in August and a six-fold increase to sixty deals in September. Also in line with our expectations is the four-fold increase in on-line financing revenues from August to September of $3,178 to $13,388."

Positive Impact On Profits

"Most importantly," he said, "as the profit margins in both websites and web-based services are quite healthy, we expect to see a continuing positive bottom line impact from the growth we achieve in these businesses."

The Company, which has launched domestic auto-related websites in 15 selected cities across China over the past ten months, expects to have 60 sites in place throughout China reaching more than 70% of the auto-buying population by the end of 2011. And, it believes that the web-based services to be provided on each of these sites will markedly differentiate them from any other websites in the auto space.

Bridge Financing To Auto Dealers Also Growing

Another service launched by the Company has been dealer financing in the form of bridge loans to 4S shops (licensed auto dealers in China of which there are currently more than 350 in Beijing alone and 17,000+ nationwide). The loans are utilized by dealers for 30 days or less to finance inventory and, according the Company, also are growing and helping to cement ties with the city's auto dealers.

"The startup numbers are still quite small in this service as well," said Mr. Tong, "going from zero to three bridge financings in August and doubling that in September, generating about $730 per deal. However, even in the current extremely brisk market for auto sales, each 4S dealer must work hard to achieve profits and our wider access to and strong relationships with a number of banks eases their path to obtaining financing and makes our fee for this service (approximately $732 per deal) worthwhile. The growth potential for this service, as we expand it first in Beijing and then throughout the country, is very positive."

Growing Bank Participation On-Line

According to the Company, Beijing is one of four key hubs in different regions of China from which it intends to expand its websites to surrounding smaller cities. Currently, Beijing also is where the Company has focused its most advanced marketing efforts through cooperation with the largest auto mall in the city which has been attracting a growing number of visitors and where www.at160.com is promoted extensively and highly visible. Going forward, it expects that its marketing efforts in Beijing can be replicated in other cities it has targeted for launching its financing services. Additionally, the Company said it is engaged in discussions with other banks that are seeking to utilize www.at160.com to promote their services, initially in Beijing, including China Merchants Bank and Pudong Development Bank where negotiations are in an advanced stage.

Continuing Growth

"Clearly," Mr. Tong concluded, "our transition from a Company focused primarily on imported auto sales to one where our growth is being led by the expansion of our highly profitable website and web-based services is proceeding quite well and ahead of plan. The initial success of our on-line financing -- a key element in our growth strategy -- is quite exciting and points to the continuing strong growth we see ahead."

Description of China Auto Logistics Inc.

With 2008 sales of approximately $190 million, China Auto Logistics Inc. (NASDAQ: CALI) 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. The Company has made the strategic decision to de-emphasize imported auto unit sales in favor of expanding its new, highly profitable domestic auto websites which are accessible through its national website, www.at160.com, launched in May 2009. Its subscription and advertising based www.at188.com is the number one site for imported car dealers and consumers. Already contributing significantly to profits, the Company believes further expansion of its websites, including the addition of new web-based auto-related services, will drive future growth. For additional information: www.chinaautologisticsinc.com.

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:
    China Auto Logistics Inc.
    US Investors
    Focus Asia Partners
    Robert Agriogianis
    Tel: 973-845-6642
    Fax: 973-845-6649

    Press
    Ken Donenfeld
    donfgroup@aol.com
    Tel: 212-425-5700
    Fax: 646-381-9727