Azure Dynamics Signs Memorandum of Understanding With Utilimaster for Hybrid Vehicle Integration

TORONTO, August 2 -- Azure Dynamics Corporation (TSX: AZD & LSE: ADC) ("Azure" or the "Company"), a leading developer of hybrid electric and electric powertrains for commercial fleet vehicles, today announced it has signed a Memorandum of Understanding ("MOU") with Utilimaster Corporation ("Utilimaster"), a leading builder of step vans, commercial truck bodies and utility vehicles, for the assembly, hybridization and manufacturing engineering of Azure's P1 hybrid electric commercial delivery vans and shuttle buses.

Under proposed terms of the MOU, Azure will provide Utilimaster with its P1 hybrid electric powertrains, which Utilimaster will integrate into Ford Motor Company's ("Ford") E-Series commercial chassis at Utilimaster's manufacturing facilities in Wakarusa, Indiana.

"This business arrangement with Utilimaster represents a vital link in our supply chain for the production of our P1 hybrid electric commercial delivery vans. We expect this agreement will result in significant cost efficiencies as we increase production volumes of the Ford E-Series hybrid delivery vans," said Scott Harrison, Chief Executive Officer of Azure Dynamics. "As a major Ford Pool Account, Utilimaster has extensive knowledge of the Ford E-Series chassis and meets all of the Ford process and quality requirements. We look forward to working with an industry leader like Utilimaster, who has built and delivered quality custom vehicles for some of the world's largest fleet operators for more than two decades."

"With 600,000 square feet of manufacturing and support facilities and approximately 1,000 employees, we have the breadth, capability and experience to accommodate the anticipated growth in demand for the Ford E-Series hybrid commercial vans and shuttle buses," said Larry Doyle, President and Chief Executive Officer of Utilimaster. "We look forward to working with Azure Dynamics and Ford Motor Company in bringing the E-Series hybrid commercial delivery vehicles and shuttle buses to market."

About Utilimaster

Located in Wakarusa Indiana, Utilimaster Corporation has been building quality custom commercial vehicles that include walk-in vans, parcel delivery vans and truck bodies since 1973. Winner of many awards and ISO 9001 certification, Utilimaster is dedicated to designing, building, and servicing vehicles. With multiple modern plants dedicated to designing and building the vehicles bodies, Utilimaster has a broad customer base in many industries, including the package delivery, truck rental, bakery/snack delivery, linen/uniform rental, and utilities markets.

About Azure Dynamics

Azure Dynamics Corporation (TSX: AZD) (LSE: ADC) is a world leader in the development and production of hybrid electric and electric components and powertrain systems for commercial vehicles. Azure is strategically targeting the commercial delivery vehicle and shuttle bus markets and is currently working internationally with various partners and customers. The Company is committed to providing customers and partners with innovative, cost-efficient and environmentally-friendly energy management solutions. For more information please visit http://www.azuredynamics.com.