MAHLE to expand filter operations in China

End of April the Joint Venture contracts to take over the existing filter activities of Shanghai Filter Factory in China were signed. In doing so MAHLE has strengthened its position in the currently largest automotive growth market.

MAHLE has an investment of 72.5 % in the joint venture company MAHLE Shanghai Filter Systems Co., Ltd. and its Chinese partner holds 27.5 %. The company manufactures air, fuel, oil and activated carbon filters for the local Chinese automotive industry, for both passenger cars and trucks. It also sells its products in the independent aftermarket.

Sales totaling approximately US $ 20 million are currently achieved in the already existing location in Pudong near Shanghai where 270 people are employed. The construction of a new, second location in Pudong will continue to expand the existing capacities not only for the Chinese market but also for the export business. Within the next 5 years sales shall increase to approximately US $ 60 million.

In addition to the filter plant in Pudong, MAHLE is already represented by a filter production plant in Tianjin through its Korean majority joint venture MAHLE Donghyun Filter Systems. The latter mainly supplies the vehicle plants of the Korean automotive manufacturers located in the Beijing area. Medium-term plans include the construction of another new filter plant in this area to ensure the supply of the automotive customers in the North with air filters and air intake modules.

For the vehicle and engine plants of the global MAHLE customers located in South China, the construction of another new filter production location in Guangzho is currently planned. Production shall start in the first term 2005.

MAHLE continues its expansion policy in China. Through the activities presently initiated, the company will be represented by state-of-the art production locations for filter systems in all major regions of China within the next 12 months. MAHLE will then be able to offer the complete product and technology competence range to its customers.

The MAHLE Group is the globally leading manufacturer of pistons, engine components and filter systems. In 2003, more than 30,000 MAHLE employees achieved sales of approximately 3.2 billion Euros in over 60 production locations. Thus MAHLE is among the 30 principal automotive suppliers throughout the world.

Stuttgart, May 18, 2004