CARH Revs Up Africa
2 May 2000
CARH Revs Up Africa
EL CAJON, Calif.--May 2, 2000--Composite Automobile Research Ltd. (OTCBB:CARH) (POH:Frankfurt), through its wholly owned subsidiary World Transport Authority Inc. (WTA), of El Cajon is pleased to announce that it has entered into an agreement (by way of a letter of understanding) with American Transport Sales Inc. (ATSI) of Lighthouse Point, Fla.This agreement calls for ATSI to commence operations for the establishment of factories to build WorldStar vehicles in the countries of Senegal and Gambia on the continent of Africa.
American Transport Sales Inc. has signed a letter of understanding to purchase the Master License for Senegal and Gambia. To that end ATSI has given to World Transport Authority Inc. a deposit for the purpose of establishing an initial factory in each of these countries. Total purchase price per factory is U.S. $372,500 with U.S. $112,500 of these funds going towards the eventual purchase price of the Master Licenses for Senegal and Gambia.
The final purchase price for the Master Licenses is still subject to final negotiations, however both WTA and ATSI thought that it was prudent to get the process of establishing the first factory in each country underway. World Transport Authority Inc. will release the final purchase price for Senegal and Gambia once it has been determined.
Based on the combined populations of both Senegal and Gambia and formulas used by WTA to determine the number of factories for each county, it is anticipated that the final figure will be in the U.S. $1,500,000 range. In addition to the initial factories ATSI has agreed by way of option to purchase 2 additional factories for each country good through Nov. 30, 2000.
ATSI plans along with the establishment of each factory to purchase the components and materials necessary to build the first 300 vehicles for their initial production run. It is anticipated that the Senegal factory, when a Diesel engine becomes available, will produce the WorldStar as a diesel model.
WTA Senior Vice President Joe Parker voiced a strong endorsement for ATSI: "It is a company with a great deal of African and Automotive Experience. Although these agreements on the surface may not appear to be large, WTA is confident that the establishment of the initial factories and production of the WorldStar vehicle in Senegal and Gambia will lead to additional Master License agreements in Africa. It has long been a part of WTA's business model to become a powerful presence in the African automobile market, a continent extremely well suited for the WorldStar vehicle."
ATSI President Kim Barkan agreed, "Our preliminary market study shows that the WorldStar(R) price is about half that of other products in the light utility vehicle market segment in Senegal and Gambia. By assembling the vehicle in a Senegal WorldStar(R) factory, we will save $2,500 per vehicle in shipping costs alone. In addition, the vehicle content is absolutely perfect for the mainstream Sene-Gambian consumer, who wants a simple, rugged vehicle that is easy to maintain and repair."
Senegal is one of the most economically developed French-speaking countries in Africa, with strong agro-business and tourism sectors. The country's nine million inhabitants recently elected a new president and government. The capital Dakar is one of Africa's leading industrial and service centers.
Gambia has a population of about 1.5 million English-speaking citizens, and is a popular tourist destination for Europeans. Gambia also has a strong agriculture and fishing sector.
Composite Automobile Research Ltd. and World Transport Authority Inc. serve the emerging world's transportation needs through in-country manufacturing facilities utilizing local semi-skilled labor to produce the WorldStar(R) line of utility vehicles.
This press release contains forward-looking statements within the definition of Section 27A of the Securities Act of 1933, as amended and such section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements should not be used to make an investment decision. Refer to the WTA Web site at www.WTAWorldstar.com and other sources for more detailed information. Investor Relations is at 619/387-8888.