July 17, 2009
Notice Regarding China-based FAW Jilin
DAIHATSU MOTOR CO., LTD. (Daihatsu) signed a memorandum on June 30, 2009 regarding a change in the framework of the joint business with China FAW Group Corporation (FAW) and FAW Jilin Automobile Co. Ltd. (FAW Jilin Auto) in accordance with its technology licensing agreement with FAW Jilin Auto.
(1) In June 2007 Daihatsu, together with FAW Jilin Auto, an affiliate of FAW, began sales of the Xenia (Chinese name: Sen Ya), a compact multi-purpose passenger car. However, two years after the beginning of sales, and facing a situation where only 5,100 units were sold in 2008, meetings with the partners FAW Jilin Auto and FAW began to be held regarding business-related issues and policies to break through the current impasse, as well as regarding measures to advance their joint business in the future. These talks led to a revision in the framework of their alliance and an agreement to further enhance management efficiency.
(2) Content of Agreement
*Discussions are currently underway regarding issues that include the time period and details regarding the two points listed above, as well as how the vehicle body and parts manufacturing company established jointly by Daihatsu and FAW Jilin Auto in April 2006 will be handled.
(3) Background to the Agreement
Daihatsu intends to spur the continued development of the joint business of FAW Jilin Auto and FAW in China, while at the same time focusing its resources for the development, production and sale of inexpensive, fuel- and resource-efficient vehicles, thus bringing about a thorough reorganization that results in a business that is simple, slim and compact.