SmarTire Signs Multi-Million Dollar Distribution Agreement in Principle

Master Distributor to establish network of certified dealers throughout China

OTCBB: SMTR

RICHMOND, BC, Sept. 10 -- SmarTire Systems Inc. (OTCBB: SMTR) announced today that it has signed an agreement in principle appointing Beijing Boom Technology Co. Ltd. as the Master Distributor of SmarTire's industry-leading Tire Pressure Monitoring Systems (TPMS) in China. Beijing Boom Technology has agreed to purchase over $1.5 million in additional aftermarket passenger car TPMS systems at fixed intervals over the next twelve months. In order to maintain its status as SmarTire's Master Distributor in China, Beijing Boom Technology must also purchase approximately $3.9 million in additional aftermarket passenger car TPMS systems during the twelve-month period commencing September 1, 2004.

Beijing Boom Technology must also establish a network of certified dealers in all provinces of China by May 1, 2004. The parties have agreed to work together to finalize a formal Master Distributor Agreement, which reflects the agreement in principle.

"The initial success that we have achieved with SmarTire's products has confirmed our belief for the potential of TPMS in the Chinese market," says Cai Jian Ming, President of Beijing Boom Technology. "The Chinese passenger car market is experiencing incredible growth at 20% - 30% per year. As SmarTire offers the most technologically advanced and reliable passenger car TPMS products, we are very excited to be appointed the Master Distributor in China."

"China represents SmarTire's fastest growing international market for our aftermarket TPMS systems," says Robert Rudman, President and CEO of SmarTire. "During the past several months, Beijing Boom Technology has demonstrated a thorough understanding and commitment to our products and we look forward to working with them to fully develop the important opportunity that China represents to both of our companies."

In 2002, almost 3.25 million vehicles were sold in China. It is estimated that annual vehicle sales will reach 5 million by 2010, making China the fastest growing market in Asia. (Source: BBC News World Edition January 31, 2003, "China car sales soar")

SmarTire Systems Inc. develops and markets proprietary tire monitoring systems for the transportation industry worldwide. Incorporated in 1987, SmarTire is a public company with offices in North America and Europe. Additional information can be found at www.smartire.com.

  "Al Kozak"

  Al Kozak
  Chief Operating Officer