1 .What is the major business of Weichai Power? How is the scale of the company? Was there any growth in productivity over the past few years?

- Weichai Power is a leading manufacturer of diesel engine in PRC, with experience and advanced technology in the development, production and sales of high-speed heavy-duty diesel engines.
- Company Scale
- The Company is a major diesel engine manufacturer in the PRC specializing in the manufacture of high-speed heavy-duty diesel engines and established reputation among customer base.
- The Company has a significant market share in the new heavy-duty vehicles with a load capacity of 15 tons (or above) of an average 71.3%, and it enjoys relatively greater advantages among competitors.

2. Have the Company ever promote the products to overseas markets? What kind of markets? Will the sales be made through agents?

- The Company will now only focus on the market in PRC, all the sales are from China.
- The Company had a national service network that has offices in major markets and was in charge by a service team of approximately 280 members.
- The Company emphasized on after-sales services. A total of 46 service centers and 480 licensed service centers are established all over China.

3. Where are the internal sales market concentrated? Are they direct sale or sales through agent? How many percent of total sales they account for?

- We have offices in major markets within PRC to serve the major manufacturers of high-speed heavy-duty diesel engines. Those companies are located in different provinces, including Shangdong, Shannxi, Chongqing, Beijing, Guangxi and Fujian.
- The Company sales are mainly direct sales.
- The Company had national service network that has offices in major markets and was in charge by a service team of over 280 members.

4. What are the marketing strategies of Weichai Power? What are the differences between Weichai Power and your competitors?

- The Company has a global service network and has offices in major markets in charge by a service team of 280 members.
- We believe our emphasis in after-sales service is the main reason for our outstanding performance. A total of 37 service centers and 480 licensed service centers are established all over China. We believe there are not many companies that possess after-sale service in such scale and effectiveness.

5. Are there any seasonal sales for the products? What are the factors affecting the product sales of the company?

- The Company products are not materially affected by seasonal change.
- As the products are mainly for heavy-duty vehicles and construction machines, the sale of the products will be affected by the change in both markets.
- However, with the remarkable and sustainable growth in China's economy, development of highway network, increase in infrastructure programs, rapid development of logistics industry, the development of diesel engines industry will be greatly accelerated. The Company is confident in grasping opportunities with its leading position in the market, production facilities with one-stop fabrication and economies of scale, outstanding product quality and technology, comprehensive after-sales services and its strong research and development capability.

6. What kind of products do you have at present? How many types of products are there?

- The 2 types of products of the Company are WD615 and WD618 engines.
- There are mainly 5 uses for WD615 and WD618 engines,
- Heavy-duty vehicles
- Construction machine engines
- Vessel engines
- Coaches
- Power generator engines

7. What are the quality control strategies of the Company?

- The Company took the lead in receiving ISO9000: 2000 Quality Assurance System Certification.
- Quality Control Strategies,
- Large amount of raw materials are self-produced, by using the one-stop fabrication production, the Company is able to inspect the processed products efficiently.

8. Are there any special features or advantages of the products? Do you receive any award or certificate?

- Our products are famous of advanced technology, great capability and high quality, while other competitors are lagged behind.
- Besides, the Company strictly monitors the implementation of laws of environmental protection. Our major products WD615 and WD618 attained Euro II standard in 2002, which is two years earlier than the assigned deadline of implementation. This proves the strong research and development capability of the Company to strengthen the Company's reputation.

9. Have the Company started any large-scale production of Euro II engines? How is the production volume at present?
- The Company is using Euro I Engines
- The Company is now producing Euro II engine in a large-scale. The Company will focus on the production and sales of WD615 and WD618 Euro II engines.
- The Company has launched the sale of Euro II engines in small-scale and received satisfactory response. The Company has the capabilities and can commence large-scale production at any time according to the customer’s demand.

10. After China's entry of the WTO, will the Company be affected by the loosening of import of diesel engines? How would you cope with competition?

- The Company believes that it requires quite a period of time for local or overseas competitors to challenge the dominant position of the Company in diesel engines industry. As effective after-sales service network is of utmost importance to heavy-duty vehicles, it is unlikely that foreign enterprises could compete with us.
- The Company has the advantages of economies of scale; it is difficult for new competitors to challenge our advantage in selling price.
- Besides, our technology has leading position in the PRC. Provide with the advantages in selling price when compared with overseas manufacturers and the long-term relationship with major heavy-duty vehicle manufacturers, the Company is confident in maintaining its dominant position in market share after China's entry of WTO.
- Import tax of diesel engines with power generation of 132kW or above has no reduction after China's entry of WTO. As power generation of WD615 and WD618 diesel engines exceeds 132kW, there will have no effect on our products.
- For new market entrants, entry barrier is relatively higher as the diesel engine industry requires higher more investment as well as higher technological level