Iteris Establishes New Strategic Agreement with Valeo to Deliver Vision Systems to Worldwide Passenger Car Market in 2004

ANAHEIM, Calif.--Oct. 1, 20036, 2003--

Iteris and Valeo Move From a Limited Marketing Agreement to a Broad-Scale Strategic Partnership

Iteris, Inc., a subsidiary of Iteris Holdings, Inc. (OTCBB:ITRSA)(OTCBB:ITRSB), today announced that Valeo, one of the world's largest Tier 1 automotive suppliers, will exclusively integrate Iteris' AutoVue Lane Departure Warning (LDW) technology into other applications for the worldwide passenger car market. Production on the first LDW passenger car application for the North American market will start in 2004. Ranked as the ninth largest automotive supplier, Valeo is a $10 billion company with 100 divisions and a presence in 25 countries.

As part of the agreement, Iteris will receive funding from Valeo for technology license fees and technical support as well as royalties on future sales. In addition to its partnership with Valeo, Iteris will continue to focus its own LDW manufacturing and marketing efforts in the worldwide heavy truck (Class 8) market.

"This partnership further demonstrates Valeo's vision to rapidly develop and market new systems that will contribute to enhanced road safety, especially when linked to other driver support systems," said Thierry Morin, Valeo Chairman & Chief Executive Officer.

"We are pleased to partner with an automotive supplier that has the global market reach and size of Valeo. This agreement represents a major milestone in the future availability of lane departure warning systems to the passenger car market -- a move that we believe will address the nation's single largest cause of automotive-related highway fatalities -- unintended lane changes caused by distracted or drowsy drivers," said Jack Johnson, president and chief executive officer of Iteris, Inc.

Iteris will license the advanced image processing-based LDW to Valeo, whereby it will be integrated into Valeo's comprehensive line-up of automotive sensors and electronic systems for class 1 and 2 passenger cars. Valeo will assume all of the engineering application, manufacturing and marketing responsibilities for the LDW from Bietigheim, Germany and Auburn Hills, Mich., where Valeo's Switches and Detection Systems Branch R&D centers are located.

"Over the past couple years Iteris has enjoyed early success with this safety solution in the Class 8 truck market in Europe, but with nearly 250 million vehicles worldwide, we've always viewed the passenger car market as the biggest market opportunity -- and a key opportunity for Iteris. Through the strength of Valeo's global resources, we expect to see the LDW available to consumers very quickly and at much higher volume levels," continued Johnson.

The Lane Departure Warning technology is embodied in a small, integrated unit consisting of a camera, onboard computer and software that can be packaged into the overhead console behind the rearview mirror -- out of the driver's sight. The unit's camera tracks visible lane markings and continually feeds the information directly into the unit's computer, which combines this data with the vehicle's speed. The system can alert drivers with an audible, "virtual" rumble strip sound or haptic warning if they are drifting out of their lane.

About Valeo

Valeo is an independent industrial Group fully focused on the design, production and sale of components, integrated systems and modules for cars and trucks. Valeo ranks among the world's top automotive suppliers. The Group has 130 plants, 54 R&D centers, 9 distribution centers and employs 69,000 people in 25 countries worldwide.

About Iteris, Inc.

Iteris Inc., is a majority owned subsidiary of Iteris Holdings Inc., and is a leading provider of outdoor vision systems and sensors that optimize the flow of traffic and enhance driver safety. Iteris combines outdoor image processing, traffic engineering, and information technology to offer a broad range of transportation and safety solutions. Iteris Holdings and Iteris Inc. are headquartered in Anaheim, California. Investors are encouraged to contact us at 714-774-5000, or at www.iteris.com.

Important Notice

This news release contains statements that may be deemed to be forward-looking. These forward-looking statements include statements or references about a strategic relationship and new products and technology. These forward-looking statements speak only as of the date hereof and are based upon the information currently available to the company at this time. Such information is subject to change, and the company will not necessarily inform you of such changes. Actual results could differ materially from those projected in the forward-looking statements as a result of risk factors such as: costs and unanticipated expenditures associated with the strategic relationship, the impact to the operating results of the company as a result of the strategic relationship based upon the unanticipated risks associated with development of the subject technology, assumptions regarding market acceptance of the new product by both OEM customers and end users, and such other factors identified in the Iteris Holdings Inc. (formerly Odetics' Inc.) Annual Report on Form 10-K and Quarterly Reports on Form 10-Q.

Investors are strongly encouraged to review the risk factors set forth in Iteris Holdings Inc. (formerly Odetics') most recent SEC filings.