Valeo Celebrates 10 Years in China - Opens First R&D Center and Unveils Leading Technologies at Auto China 2004

BEIJING, China, June 9 -- This year Valeo celebrates ten years of activity in China and plans to continue to strengthen its presence through the introduction of new product lines, the opening of a technology center in Wuhan, the launch of its 5 Axes School and the development of the aftermarket. For the first time in the country at the Auto China Show in Beijing the company unveils automotive technologies designed to improve safety, fuel consumption and comfort for Chinese motorists.

Valeo has grown rapidly in China since it entered the market. Through its eight production facilities, sales in the region have grown by around 30 percent annually and are expected to almost double in the next two years to reach up to 600 million euros. Valeo is the uncontested leader in China for electrical systems and wiper systems and is also strongly present in the lighting systems, climate control and clutches markets. The Group plans to rapidly introduce all its product lines in the country.

Thierry Morin, Chairman & Chief Executive Officer said, "The Chinese market represents a key area in the future growth of Valeo. The opportunities are enormous, and we are establishing technical centers and the 5 Axes School to ensure that we can serve our customers with the same quality and technology as in other regions."

The Group's first technical center in China opens later this year and will develop advanced automotive lighting systems for both Chinese and European car makers. Initially the center will focus on projects for the local market, but it is anticipated that it will rapidly start working with other technical centers around the world on joint projects for all markets.

To further enhance the competitiveness of its Chinese facilities, a special 5 Axes School, specifically designed to train all Chinese employees of Valeo in the Total Quality culture and methodology of the Group, is scheduled to open in September following intensive training of the five instructors who have been selected from the Group's Chinese operations.

The aftermarket opportunities are also huge. By 2010 China's passenger vehicle parc should reach 20 million vehicles. Valeo has a threefold aftermarket strategy - to sell in the Chinese aftermarket products produced locally, to distribute aftermarket products for imported vehicles and to manufacture specific products in China for the aftermarket. This year a marketing office has been established and a distribution network for alternators is already well developed.

Valeo's Asia Purchasing Office, opened in Shanghai in 2001, expects to triple its sourcing from the current 300 million euros to one billion euros in three years. The office has already demonstrated its ability to locate qualified suppliers and train them where necessary to meet global standards in cost-competitiveness, quality, productivity, service, innovation and technology. The Purchasing Office is a key resource for all Valeo Branches throughout the world and contributes to Valeo's objective to source 70% of its purchases in low cost countries by 2010.

Valeo started in China in 1994 with the opening of its Beijing Head Office and the creation of joint ventures for wiper systems and climate control systems. Other joint ventures followed rapidly to bring the total to eight joint ventures. Product lines manufactured are lighting systems, starters and alternators, wiper systems, security systems, heating, ventilation and air conditioning systems, motors and actuators and clutches. Valeo employs almost 3,000 people in China and serves all major passenger car and truck OEMs in the Chinese market.

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 129 plants,65 R&D centers, 9 distribution centers and employs 68,700 people in 26 countries worldwide.