TIANJIN, CHINA--(Marketwired - Aug 7, 2014) - China Auto Logistics Inc. (the "Company" or "CALI") (NASDAQ: CALI), a top seller in China of luxury imported automobiles, a leading provider of auto-related services and a soon to be entrant in used car sales in China, announced today it has signed a twenty year Strategic Cooperation Agreement (the Agreement) with a leading leasing and development company for China's auto dealers, aimed at jointly developing an e-commerce based high-end imported auto sales and related services business in China, supported by a chain of auto malls to be built or acquired throughout the country.
The partners to the agreement are CALI subsidiary Tianjin Binhai Shisheng Trade Group Co., Ltd, and Tianjin Binhai International Automall Co., Ltd., which owns the International Automall in Tianjin that was successfully managed by CALI until the recent acquisition by CALI of the Airport International Automall in Tianjin. The companies said their decision to move ahead was boosted by the recent (Aug. 1) announcement by China's State Administration for Industry and Commerce (SAIC) of new policies to regulate the distribution of imported vehicles in China. The Companies believe the new policies create a significant new growth opportunity for them by essentially freeing them up to sell any brand of imported cars they desire.
Confident of Success
According to Mr. Tong Shiping, Chairman and CEO of CALI, who has been selected to head the new cooperative venture, "CALI actually has operated with the same guidelines that have been promulgated, but now has a new freedom to match a wider variety of vehicles with consumer preferences. Further, our know how and sales leadership in the imported auto niche and our experience with on-line marketing, both good and bad, combined with our partner's experience in developing the leading imported auto mall in China -- a project we have worked together on for several years -- makes us very confident we can take our businesses to entirely new levels of success even with more potential competition."
Mr. Shiping said while collaborating closely to grasp the strategic opportunity and extend their respective Tianjin operations to the rest of the country, each partner will initially operate on a financially independent basis and on the basis of "market fairness" in transactions between themselves. However, they may consider establishing a joint business entity at an appropriate time.
Auto Related Services as Well as Imported Auto Sales
"For the same reasons we've always had," Mr. Shiping said, "our focus will be not only on building sales of imported cars on what we think can be a more profitable basis with the utilization of the internet, but also on expanding on a much greater scale our much more profitable auto related services."
"We expect to be moving forward together around the start of October," Mr. Shiping said, "with each partner as the exclusive strategic partner of the other, and with the shared goal of achieving and maintaining success as quickly as possible." He added, "I will inform shareholders of key decisions we reach along the way, and hope they will share our excitement and our belief that this is a development we have been striving for that truly can transform our Company."
About China Auto Logistics Inc.
China Auto Logistics Inc. is one of China's top sellers of imported luxury vehicles. It also provides a growing variety of "one stop" automobile related services such as short term dealer financing. Additionally, in November, 2013, it acquired the owner and operator of the 26,000 square meter Airport International Automall in Tianjin for $91.4 million, with plans to develop it, among other things, as the flagship site for a used car business, with Car King (China) Used Car Trading Co., Ltd.
About Tianjin Binhai International Automall Co., Ltd.
Established in 2002, the Tianjin International Automall has 42,000 square meters of exhibition space. In 2013, more than 50,000 imported cars were sold in this facility with a total transaction value of over RMB 40 billion (approx. U.S. $6.49 billion).
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.