Advanced Engine Components Signs Agreement with Dongfeng Of China

Advanced Engine Components Ltd ("ACE") of Australia has signed a natural gas ("NG") engine development programme with Dongfeng Nanchong Automobile Co Ltd ("Dongfeng") of China.

Dongfeng is a subsidiary of China's third largest automotive manufacturer Dongfeng Motor Group Co Ltd.

Dongfeng's main products are engines, chassis' and bodies for light, medium and heavy duty trucks and buses. Dongfeng is one of the largest producers of NG engines in China. In the 2006 calendar year Dongfeng will complete a new production facility with a capacity of 30,000 vehicles and 20,000 NG engines per annum. Dongfeng expects to produce 4,000 to 5,000 NG engines in the 2006 calendar year with sales particularly strong through central and southern China.

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