Zongshen PEM Power Systems Inc.

Zongshen PEM Power Systems Inc.

February 17, 2011 07:00 ET

Zongshen PEM Introduces Four New Motorcycles to the Export Markets and Launches a New Website

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Feb. 17, 2011) - Zongshen PEM Power Systems Inc. (TSX:ZPP) ("ZPP" or the "Company") is pleased to announce the addition of four new motorcycles for the Company's key export markets and the launch of a new website.

New Products

ZPP will introduce four new cub style motorcycles in the 110-125 cc range targeted at markets in Latin America, Africa and Southeast Asia in the spring of 2011. These cub style motorcycles are particularly popular with commuters because the upright design provides maximum riding comfort. These products will target the mid-segment of the respective markets and with a selling price of between $425 and $675 to distributors.

Three of the four bikes are based on domestic motorcycle models but redesigned for ergonomics and style suited for the export markets. The one new motorcycle which sells at the top of the price range includes an updated design, larger 4.5L gas tank and LED headlamps. ZPP will collaborate with its suppliers to manufacture these new motorcycles which will absorb the cost of redesigning the bike molds and frames. The new bikes will have a large number of common parts with existing models as they are manufactured using existing bike platforms.

Consistent with ZPP's plans to increase its own brand awareness and recognition overseas, these four models are Zongshen branded motorcycles. Currently, approximately 40% of export sales are Zongshen branded motorcycles while the remaining 60% of the exports are sold as OEM brands such as Corven for the Argentinian market and Kansas for the Brazilian market.

Strong Export Growth

ZPP's exports rebounded sharply in 2010 with export sales of approximately 185,000 units representing a 220% increase over 2009 export shipments that were only 84,000 units because of the global recession. The new products are expected to make a significant contribution to export sales. Industry forecasters expect a continued robust growth in motorcycle demand over the coming years lead by China, Latin America, Southeast Asia and Africa - all markets where ZPP has developed strong distribution networks. Like China, the demand for motorcycles in these export markets is driven by rising incomes, high fuel costs and the significant price advantage a motorcycle has over a car.

ZPP, as one of China's top motorcycle exporters, is positioned to take advantage of these market opportunities. ZPP has built a strong franchise in over 90 countries and is known internationally for producing high quality and good value motorcycles. In 2011, ZPP has plans to enter into 6 additional countries in Africa and Southeast Asia. The Company also has plans to leverage existing distributor relationships in current markets to explore additional revenue opportunities. In the near term, ZPP will increase the credit limits of certain distributors to support their sales growth and work with them to jointly increase the level of advertising and promotional campaigns.

"We will continue to introduce new Zongshen branded motorcycles and increase the number of markets we cover as part of our goal to become a global brand. Our distributors are key enablers of this strategy as they provide us with first hand local information, which allows us to seize the most attractive market opportunities. But core to building a brand are the products we produce. Our motorcycles are high quality and offer riders good performance for an attractive price. As motorcycles are one of the most affordable and efficient forms of transportation, they play an important role in improving the productivity and quality of life in the developing world. We at ZPP are very proud to be part of that," said Mr. Zuo Zongshen, CEO and Chairman of ZPP.

New Website

As part of ZPP's continuing emphasis on improving shareholder relations and increasing market exposure, the Company has updated its website to a new, fresher look with greater functionality and depth of information. The site contains new FAQ and product information sections in keeping with the Company's commitment to increase shareholder awareness of ZPP and its products. The new site can be accessed through the same address, at www.zongshenpem.com. A new Chinese language website is launched as well with e-commerce features enabled for the users in China.

About Zongshen PEM Power Systems Inc.

Zongshen PEM Power Systems Inc. is a public company trading under the symbol ZPP on the Toronto Stock Exchange. The Company manufactures gas motorcycles, electric motorcycles, electric bicycles and other e-vehicles in China for the Chinese domestic and international markets. Zongshen PEM Power System's largest shareholder is Zongshen Industrial Group, one of China's largest manufacturers and distributors of engines and power equipment.

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