Wuling Motors : CONTINUING CONNECTED TRANSACTIONS - RENEWAL OF EQUIPMENT PURCHASE FRAMEWORK AGREEMENT

Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this announcement, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this announcement.

CONTINUING CONNECTED TRANSACTIONS -

RENEWAL OF EQUIPMENT PURCHASE FRAMEWORK AGREEMENT

Financial Adviser to the Company

Kingsman HK Capital Limited

金仕萬香港資本有限公司

BACKGROUND

Reference is made to the announcement of the Company dated 28 April 2020 in relation to the 2020 Equipment Purchase Framework Agreement. The 2020 Equipment Purchase Framework Agreement was expired on 31 December 2020 and it is expected that Wuling Auto Tech, a wholly-owned subsidiary of Guangxi Automobile and a connected person of the Company, will continue to participate in the bidding for some or all of tenders published by Wuling Industrial Group in relation to the purchase of Equipment. In order to streamline the processes and to serve as the governance framework in respect of any future continuing connected transactions entered into between Wuling Industrial Group and Wuling Auto Tech, resulting from the selection of Wuling Auto Tech as the successful bidder for any of the abovementioned tenders, on 13 May 2021 (after trading hours), Wuling Industrial and Wuling Auto Tech entered into the 2021-2023 Equipment Purchase Framework Agreement in relation to the Equipment Purchase Transactions for the period commencing from the effective date of the 2021-2023 Equipment Purchase Framework Agreement to 31 December 2023. The Annual Caps for the Equipment Purchase Transactions as stipulated in the 2021-2023 Equipment Purchase Framework Agreement are RMB41,000,000 (excluding VAT), RMB46,000,000 (excluding VAT) and RMB49,000,000 (excluding VAT) for the three years ending 31 December 2021, 2022 and 2023, respectively.

- 1 -

LISTING RULES IMPLICATIONS

As of the date of this announcement, Wuling Auto Tech is a wholly-owned subsidiary of Guangxi Automobile, while Guangxi Automobile, being the ultimate controlling Shareholder of the Company, through its direct and indirect wholly-owned subsidiaries, is interested in approximately 56.54% of the total number of Shares in issue of the Company. In this regard, Wuling Auto Tech is a connected person of the Company under the Listing Rules. The Equipment Purchase Transactions contemplated under the 2021- 2023 Equipment Purchase Framework Agreement constitute continuing connected transactions for the Company Under Chapter 14A of the Listing Rules.

As the highest applicable percentage ratio (as set out in Rule 14.07 of the Listing Rules) in respect of the Annual Caps, on an annual basis, is more than 0.1% and less than 5%, the entering into the 2021-2023 Equipment Purchase Framework Agreement together with the transactions contemplated thereunder (including but not limit to the Annual Caps) constitute continuing connected transactions which are subject to the reporting, annual review and announcement requirements under Rule 14A.76 of the Listing Rules, but exempt from the independent shareholders' approval requirements under Chapter 14A of the Listing Rules.

BACKGROUND

Reference is made to the announcement of the Company dated 28 April 2020 in relation to the 2020 Equipment Purchase Framework Agreement. The 2020 Equipment Purchase Framework Agreement was expired on 31 December 2020 and it is expected that Wuling Auto Tech, a wholly-owned subsidiary of Guangxi Automobile and a connected person of the Company, will continue to participate in the bidding for some or all of tenders published by Wuling Industrial Group in relation to the purchase of Equipment. In order to streamline the processes and to serve as the governance framework in respect of any future continuing connected transactions entered into between Wuling Industrial Group and Wuling Auto Tech, resulting from the selection of Wuling Auto Tech as the successful bidder for any of the abovementioned tenders, on 13 May 2021 (after trading hours), Wuling Industrial and Wuling Auto Tech entered into the 2021-2023 Equipment Purchase Framework Agreement in relation to the Equipment Purchase Transactions for the period commencing from the effective date of the 2021-2023 Equipment Purchase Framework Agreement to 31 December 2023. The Annual Caps for the Equipment Purchase Transactions as stipulated in the 2021-2023 Equipment Purchase Framework Agreement are RMB41,000,000 (excluding VAT), RMB46,000,000 (excluding VAT) and RMB49,000,000 (excluding VAT) for the three years ending 31 December 2021, 2022 and 2023, respectively.

- 2 -

2021-2023 EQUIPMENT PURCHASE FRAMEWORK AGREEMENT

The principal terms of the 2021-2023 Equipment Purchase Framework Agreement are summarised as follows:

Date:	13 May 2021
Parties:	柳州五菱汽車工業有限公司 (Liuzhou Wuling Motors Industrial
	Company Limited*) as purchaser and 柳州五菱汽車科技有限公司
	(Liuzhou Wuling Automotive Technology Limited*) as vendor.
Term:	From the effective date of the 2021-2023 Equipment Purchase
	Framework Agreement to 31 December 2023
	Save for the reporting, annual review and announcement
	requirements under Rule 14A.76 of the Listing Rules as detailed
	in the section headed ''Listing Rules Implications'' below, the
	2021-2023 Equipment Purchase Framework Agreement is not
	subject to any regulatory approval requirement and condition
	precedent, and the agreement has become effective upon
	publication on this announcement by the Company.
Equipment subject to	The equipment, machineries and/or toolings which shall be
sale and purchase:	purchased by the Wuling Industrial Group for the purposes of
	installation, upgrading, modification, repairing and maintenance of
	new and existing production facilities and machinery for the
	production and testing processes of its engines products,
	automotive components products and specialized vehicles. Details
	of the equipment, machineries and/or toolings which shall be
	purchased by the Wuling Industrial Group for the three years
	ending 31 December 2021, 2022 and 2023 are set out in Annex 3
	to the 2021-2023 Equipment Purchase Framework Agreement.

- 3 -

Equipment Purchase	The 2021-2023 Equipment Purchase Framework Agreement sets
Transactions:	out the framework structure of any Equipment Purchase
	Transactions that may be entered into between Wuling Industrial
	Group and Wuling Auto Tech, in accordance with the standard
	tender process of the Group, during the terms of the 2021-2023
	Equipment Purchase Framework Agreement. Upon a tender,
	whether public tender or private tender, in relation to the
	procurement of an Equipment by Wuling Industrial Group having
	been published while Wuling Auto Tech having submitted a bid
	and having been selected as the successful bidder for such tender
	in accordance with the Group's standard tender process, Wuling
	Industrial and Wuling Auto Tech will enter into a Specific S&P
	Agreement which will set out the terms and conditions of the
	relevant Equipment Purchase Transaction and which will be in
	compliance with the applicable laws and regulations (including the
	Listing Rules). Samples of Specific S&P Agreements are set out in
	Annex 1 and Annex 2 to the 2021-2023 Equipment Purchase
	Framework Agreement.
	The Equipment Purchase Transactions shall be conducted in the
	ordinary and usual course of business of the Group; the terms of
	the Specific S&P Agreements shall be subject to arm's length
	negotiation among Wuling Industrial Group and Wuling Auto
	Tech, being conducted in accordance with the Group's standard
	tender process, on normal terms or on terms which are no less
	favourable than those offered by independent third parties to the
	Group; and the Specific S&P Agreements and the transactions
	contemplated thereunder shall be in compliance with applicable
	laws and regulations (including the Listing Rules) and the 2021-
	2023 Equipment Purchase Framework Agreement.
Pricing policy	The purchase of the Equipment by Wuling Industrial Group will
pursuant to the	be subject to the Group's standard tender process with reference to
Group's standard	the market price of similar equipment. Wuling Industrial will set
tender process:	out its requirements for the Equipment together with its
	assessment basis in the tender document. Overall assessment of
	the technical capability and the terms (including the tender prices)
	offered by the bidders will be conducted and the tender will be
	awarded to the bidder with the highest overall ranking.

- 4 -

Annual Caps for the three years ending 31 December 2021, 2022 and 2023

Compliance with the Listing Rules:

Internal control measures have been put in place to ensure the tender process relating to any purchase of the Equipment will be conducted in accordance with the Group's standard tender process and in a fair and open manner. Details of the internal control measures are set out under the following section headed ''Internal Control Measures''

The 2021-2023 Equipment Purchase Framework Agreement sets out the Annual Caps amounted to RMB41,000,000 (excluding VAT), RMB46,000,000 (excluding VAT) and RMB49,000,000 (excluding VAT) for each of the three years ending 31 December 2021, 2022 and 2023, respectively. Details of the Annual Caps are more fully described under the following section headed ''Annual Caps under the 2021-2023 Equipment Purchase Framework Agreement''.

The transactions under the 2021-2023 Equipment Purchase Framework Agreement are regarded as continuing connected transactions of the Company under the Listing Rules and the 2021-2023 Equipment Purchase Framework Agreement would become effective upon (i) having been complied with the Listing Rules, any other relevant laws and regulations; and (ii) (if required) having been approved by the independent Shareholders.

The parties to the 2021-2023 Equipment Purchase Framework Agreement have confirmed that they would provide with the necessary assistance for the Company's compliance with the Listing Rules, any other relevant laws and regulations as well as the request from the Stock Exchange from time to time regarding to the provision of all required relevant documents and information to the Company and its auditors, accountants, lawyers and other professional advisers.

HISTORICAL TRANSACTION AMOUNT

For the year ended 31 December 2020, the actual transaction amount entered into by the Group and Wuling Auto Tech for the equipment purchase transactions under the 2020 Equipment Purchase Framework Agreement was approximately RMB23,752,000 and utilised approximately 84.8% of the RMB28,000,000 annual cap for the year ended 31 December 2020 as stipulated in the 2020 Equipment Purchase Framework Agreement. The Directors confirm that no Equipment Purchase Transactions were conducted for the four months ended 30 April 2021 and up to the date of this announcement before entering into the 2021-2023 Equipment Purchase Framework Agreement.

- 5 -