Sun Motor Announces Increase in Contract Price for Major Customer

Hong Kong, June 7 /Xinhua-PRNewswire-FirstCall/ -- Sun Motor International, Inc. (BULLETIN BOARD: SNMO) ("The Company") today announced that it has reached agreement with its long standing customer Aichi Electric Co., Limited of Japan that the sale price for various micro motors for use in air conditioners and heating appliances manufactured by Aichi be increased up to 12% with payment terms shortened by a period of 2 weeks. This negotiated increase comes against the background of recent increases in the price of raw materials, particularly copper, which are used in the manufacturing process for micro motors utilized in Aichi products.

In addition, Sun Motor and Aichi also reached a cooperation arrangement for Aichi to provide production and technical guidance and support to improve Sun Motor's production efficiency and yield.

Aichi is a Japanese industrial company with products including power transformers, control equipments and automated industrial equipments.

In announcing this agreement, Simon Shi, Chairman of Sun Motor commented as follows; "We are happy that Aichi recognize the quality of our relationship and are prepared to agree to this price increase, particularly against the background of a high level of competition in the industry. We are proud of our reputation as a manufacturer of the highest quality motors and this reputation is reflected in the fact that the majority of our customers are international brand name companies." Mr Shi continued, "More often than not, comparatively cheaper priced products will not guarantee business with these customers. Given increasing demands on speed, tolerance levels and longevity expected from micro motors, particularly in more recent applications such as the automotive industry, our brand name customers need to feel confident that suppliers can meet a wide range of quality, price and reliability benchmarks. Sun Motors is justifiably proud of its ability to exceed these benchmarks with its highly efficient state of the art production facilities, operating systems and most importantly, personnel, by and large, the envy of the industry in southern China."

About Sun Motor International, Inc.

Founded in 1983, Sun Motor designs, manufactures and markets micro motors for a wide range of applications including automotive components, business equipment, power tools, home appliances, audio and visual equipment and personal care products. Sun Motor's customers are located in Asia, Europe and North America. Additional information is available at www.sunmotor.com.hk .