SmarTire Systems Applauds NHTSA Rulemaking; Requirement for Tire Monitoring Systems Represents Major Milestone in Vehicle Safety

    RICHMOND, British Columbia--June 5, 2002--SmarTire Systems Inc. , a leading developer of tire pressure and temperature monitoring technology, applauds the publication of the National Highway Traffic Safety Administration (NHTSA) rulemaking regarding the TREAD Act of 2000. This ruling, originally expected in November 2001, requires the installation of tire pressure monitoring systems (TPMS) in passenger vehicles and light trucks beginning November 1, 2003. With TPMS compliance standards and specifications now defined, the auto manufacturers must proceed with the granting of supply contracts in order to achieve the NHTSA implementation schedule. SmarTire and its strategic partners have developed a joint marketing program designed to successfully satisfy the significant product demand created by this ruling.
    The NHTSA ruling on tire monitoring represents a major milestone in vehicle safety. Since 1987, SmarTire has pioneered the research and development of tire monitoring technology and has advocated that tire monitoring will become the next major breakthrough in vehicle safety following airbags and anti-lock brakes. In preparation for this NHTSA ruling, SmarTire has taken several key steps to place the Company in a strong, competitive position.
    SmarTire has signed a memorandum of understanding with Visteon, a global auto parts supplier formerly owned by Ford Motor Company, to co-develop and market TPMS for OEM auto manufacturers. Together with Visteon, the Company has achieved the product cost-reduction necessary to succeed in this extremely competitive marketplace. In addition to the original equipment market, SmarTire is also in the unique position of having an established aftermarket distribution channel in North America and Europe. The phasing in of the TREAD Act and the current lack of competition have created a significant aftermarket opportunity at both the automotive dealer and retail levels. With product awareness rapidly increasing throughout the industry, SmarTire is aggressively proceeding with several marketing programs in North America and Europe involving automotive and tire companies, national distributors of auto parts, and retailers of auto accessories.
    The NHTSA ruling is part one of a two-part final ruling. Part one establishes a new Federal Motor Vehicle Safety Standard that requires TPMS be installed in passenger vehicles and light trucks to warn the driver when a tire is below specified pressure levels. During the first year of the implementation schedule ending October 31, 2004, at least 10% of each auto manufacturer's total production must be equipped with TPMS. This requirement increases to 25% during the second year, 65% by the third and 100% after October 31, 2006. There are two compliance options - direct or indirect measuring systems. The first option, which NHTSA states best meets the TREAD Act requirements, is a direct measurement system that alerts the driver if one or more tires, up to four tires, are 25% or more under-inflated. SmarTire's technologically advanced direct measurement tire monitoring systems satisfy the highest standards as set by the NHTSA. The key message from NHTSA is that direct measurement systems such as SmarTire's products are preferred and their long-term acceptance is assured. NHTSA will be closely monitoring the performance of the second option, indirect measurement, and on March 1, 2005, final ruling will be issued to establish whether indirect measurement will remain an option for the long-term.
    "SmarTire has succeeded in establishing itself in the OEM marketplace with its superior direct measurement technology," said Robert Rudman, President and Chief Executive Officer of SmarTire Systems Inc. "We have taken advantage of the time delay in the NHTSA ruling to advance our relationship with Visteon and to jointly develop the most competitive product offering available to original equipment manufacturers. We have the best technology, a diverse and flexible product line and the right strategic partnerships to play a major part in this next generation of vehicle safety."
    SmarTire develops and markets technically advanced tire monitoring systems for the automotive and transportation industries. Additional information can be found at www.smartire.com.
    Al Kozak, Chief Operating Officer
    This news release may include statements about expected future events and/or financial results that are forward-looking in nature and subject to risks and uncertainties. Forward-looking statements in this release include, but are not limited to, the anticipated demand for tire monitoring technology, sales of SmarTire's products and technology to original equipment manufacturers, the size of the market, the impact and scope of the new United States legislation, and the technical uncertainty of future products. It is important to note that actual outcomes and the Company's actual results could differ materially from those in such forward-looking statements. Factors that could cause actual results to differ materially include general factors such as insufficient investor interest in the Company's securities, the impact of competitive products and pricing and general economic conditions as they affect the Company's customers, and specific risks such as the uncertainty of the requirements demanded and timing specified by U.S. government, reliance on third party manufacturers to product SmarTire products and technology, and, the Company's ability to source product components in timely manner. Readers should also refer to the risk disclosures outlined in the Company's annual report of Form 10-KSB for the last completed fiscal year filed with the SEC.