Valeo Increases Share in Two CHINESE Joint Ventures to Reach 50% in Electrical Systems and 55% in Wiper Systems

PARIS, December 16 -- Valeo today announced that it signed agreements to increase its shareholding in two of its Chinese joint ventures in Shanghai one for Electrical Systems and the other for Wiper Systems.

Valeo has increased its participation in Shanghai Valeo Automotive Electrical Systems from 30% to 50% and has increased its operational and executive management in this Joint Venture. The joint venture partner is Shanghai Automotive Industry Co. Ltd (a wholly-owned subsidiary of SAIC). This joint venture was formed in 1994 and produces starters and alternators. It employs over 850 people and sells to the main Chinese car manufacturers including SVW, SGM and FAW.

Valeo has also increased its participation in Valeo Shanghai Automotive Electrical Motors and Wipers Systems from 50% to 55% thus strengthening its management in the JV. The partner for this joint venture is STEC (a subsidiary of SAIC). This joint venture was established in 1995 and produces wiper systems and electrical motors. It employs over 240 people and sells to the main Chinese car manufacturers including SVW, SGM, FAW and Jinbei.

Both transactions are subject to approval from the Chinese authorities and are expected to be completed at the end of January 2004.

"This transaction shows Valeo's commitment to the fast growing Chinese market and our global strategy for a strong presence in all the regions", said Thierry Morin, Valeo Chairman & Chief Executive Officer.

Valeo opened its first production site in China in 1994. Since then through its eight joint ventures, Valeo employs nearly 2,300 people and sales have increased rapidly to around 230 million euros.

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 125 plants, 55 R&D centers, 9 distribution centers and employs 67,000 people in 25 countries worldwide (October 2003).