Dongfeng Motor Group Company Limited ("Dongfeng Group" or "the Group", stock code: 0489) is pleased to announce the project with a capacity of 120,000 passenger vehicles of Dongfeng Honda Automobile Company Limited ("Dongfeng Honda"), the joint venture set up by the Group, has commenced operation. As a result, its annual production capacity grows three times from 30,000 to 120,000 vehicles with total investment reaching RMB2.8 billion.To cope with the booming market demand, Dongfeng Honda has expanded and upgraded its original annual production capacity of 30,000 passenger vehicles, and the project with a capacity of 120,000 passenger vehicles has commenced operation on 26 February 2006. A total of RMB2.8 billion was invested in the manufacture of the blanks for major spare parts of vehicle engines, technical fabrication and assembling, R&D of vehicle engine discharge system and driving tests, etc.In line with the capacity expansion, Dongfeng Honda also strives to set up and develop its sales and distribution network. As of the end of 2005, Dongfeng Honda has developed a sales network with 70 outlets and expects to double the number to 140 in 2006, covering 72 major cities across 29 provinces, cities and autonomous regions.Mr. Liu Yuhe, Executive Deputy Manager of Dongfeng Honda said, "Capturing the increasing demand for passenger vehicles manufactured by Dongfeng Honda in the consumer market, Dongfeng Honda is confident to achieve a sales growth in vehicles in the future, particularly the passenger vehicles. We believe the expanded annual capacity to 120,000 passenger vehicles will satisfy the market and bring remarkable investment return to Dongfeng Honda."Dongfeng Honda is a vehicle manufacturing joint venture established by Dongfeng Group and Honda Motor Co., Ltd, specializing in manufacture of SUV sedan. Dongfeng Honda has put its first generation of Dongfeng Honda CR-V on to the market since May 2004. In 2005, Dongfeng Honda reached a sales