General Overview

Brilliance China is one of the leading automotive manufacturers in China through its subsidiaries, associated companies and joint ventures in the PRC. The Group's operating segments are divided primarily into the manufacture of (i) minibuses and automotive components, and (ii) sedans. Its commercial vehicle brands include "JinBei" and "Granse" minibuses and its sedan brand includes "Zhonghua". In 2003, the Group also established a joint venture with BMW to produce BMW 3-series and 5-series sedans in China. The Group is also engaged in the manufacture of gasoline engines for use in minibuses, sedans, SUV and light trucks and automotive components, including but not limited to window mouldings, strips, axles, stamped parts, etc.

The Group sold 61,618 minibuses and 10,982 "Zhonghua" sedans in 2004, the Group's joint venture with BMW also sold 8,708 BMW sedans in 2004. The Group's strong sales performance has been supported by a substantial network of over 800 minibus distributors, over 100 distributors for "Zhonghua" sedans and over 40 distributors for BMW sedans, as well as over 330 after-sales service centers for minibuses and over 120 for "Zhonghua" sedans and 24 for BMW sedans. Currently, the Group has an annual production capacity of 120,000 minibuses and 100,000 sedans.

To further support its goal as the leading automotive manufacturers in the PRC, the Group has established strategic partnerships or working relationships with leading global automotive companies, such as Toyota, BMW AG, Mitsubishi, FEV Motorentechnik Gmbh, Porshe and Italdesign S.p.A., etc.

With over 9,100 employees, the Group achieved revenue of RMB 6,542 million for the year ended 31st December, 2004.

Corporate Strategy

The Group's business strategy is built on the following four central pillars:

• Maintain the market leadership position in the minibus sector by introducing new models of the segment-defining minibuses at competitive prices. With the launch of the new face-lift versions of the Group's current model and the domestic versions of the Toyota "Granvia" (known as "Granse" in the PRC), the Group is well-positioned to consolidate and further expand its market share in the minibus sector in the PRC;
  
  
• Strengthen the brand image and improve the competitive position of the "Zhonghua" sedans by (i) expanding the sales and distribution networks into the second and third tier cities in the PRC; (ii) improving product quality by introducing new features and options; (iii) improving cost efficiencies by increasing domestic components ratios and streamlining production and operational systems;
  
  
• Attain market leadership in the premium sedan market in the PRC through the BMW Joint Venture. With the strong brand name, innovative engineering, emotional appeal and pioneering design, the Group believes that the BMW sedans produced by the BMW Joint Venture will make an unprecedented impact on the premium sedan market in the PRC;
  
  
• Endeavor to become an active player in the Chinese automotive components industry by introducing high quality automotive components (such as engines, axles, safety systems and electronic systems) at competitive prices.

Brands and Products

	"JinBei" and "Granse" Minibus The Company (through its 51.0% - owned subsidiary, Shenyang Automotive) manufactures and sells all of its minibuses under the "JinBei" and "Granse" brand name in a variety of models based on Toyota's HIACE and GRANVIA minibus models in China. The Group's principal minibus products are the deluxe minibus and the mid-priced minibus, both targeting at different market segments in the Chinese commercial and passenger car segments. The deluxe models and mid-priced models include the "Granse", the "Aurora" and the "Shuttler".
	"Zhonghua" and "Zunchi" Sedan The Company (through its 51.0% - owned subsidiary, Shenyang Automotive) manufactures and sells all of its sedans under the "Zhonghua" and "Zunchi" brand name in China. The "Zhonghua" sedan was designed by Italdesign and was formally launched in the Chinese sedan market in August 2002. The "Zhonghua" sedan is designed for the mid-priced sedan market segments, including governmental institutions, businesses and individual users in China. The sedan models include the 2.0 liter and 2.4 liter manual transmission and the 2.0 liter and 2.4 liter automatic transmission. The "Zhonghua" sedans can also be modified for use as taxis, police cars and other specialty sedans. The "Zunchi" sedan, design modified by Pininfarina, was the "face-lift" version of the "Zhonghua" sedan.
	BMW Sedan The Company (through its 49.01% indirectly owned company, BMW Brilliance Automotive Limited) manufactures and sells all of its sedans under the "BMW" brand name in China. On 27th March, 2003, the Company (through its 98% indirectly owned subsidiary) entered into a joint venture contract with BMW Holding BV in relation to the establishment of the joint venture to manufacture, assemble and sale of the latest version of the BMW-designed and branded passenger cars, engines, parts and components in China. The 3-series and 5-series BMW sedans produced by the joint venture were launched in the Chinese sedan market in the 4th quarter of 2003. The BMW sedans are targeted at the premium sedan market in China.
	Automotive Components The Company (through its subsidiaries and joint ventures) manufactures and sells automotive parts and components, including but not limited to, window stripping and mouldings, seats, axles, safety and airbag system, interior decoration and engines for passenger cars, minibuses, SUV and light duty trucks.