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Alcoa and Yutong Bus Co., China's Leading Bus Producer, to Build Eco-Friendly, Aluminum Intensive Buses for 2008 Olympics

BEIJING & PITTSBURGH -- Zhengzhou Yutong Bus Company, Ltd, and Alcoa (NYSE:AA) announced today the formation of a partnership to apply world-class structural design, materials and manufacturing technologies to develop a new generation of energy-efficient, environmentally-friendly buses for China's growing commuting public.

The first element of the partnership will be the development of a new, environmentally-friendly bus design that will significantly reduce greenhouse gas emissions and improve fuel economy. It is anticipated that the prototypes will be ready in time for the 2008 Summer Olympic Games.

"The partnership between Yutong Bus and Alcoa on the new sustainable bus demonstrates long-term commitment to the support of our government's policy to build mass transportation vehicles in harmony with society - people and the environment," said Mr. Tang Yuxiang, Chairman and Chief Executive of Zhengzhou Yutong, China's largest bus manufacturer and the number two producer in the world.

"We realize that reducing the weight of tomorrow's short- and long-range buses will be essential for improving their sustainability," added Mr. Yuxiang, "and that the intelligent application of aluminum is one of best methods possible to achieve such mass reduction.

A recent study by the Institute for Energy and Environmental Research in Heidelberg, Germany, which was presented last month at the 2007 China Aluminum and Transportation Conference in Dalian, revealed that a weight reduction of 100 kg in a diesel-powered city bus making several stops will save 2,550 litres of fuel and significantly reduce C02 equivalent green house gas emissions over its lifetime.

"Our goal, of course, is to work with Yutong to achieve significantly more than 100 kg weight reduction per vehicle," according to Mr. Jinya Chen, Alcoa's President for the Asia-Pacific Region.

"Our companies believe that through the combination of aluminum spaceframe design and advanced manufacturing technologies, we can achieve 15 to 20 percent weight reductions while maintaining the safety and enhancing the sustainability performance of a new family of buses," Mr. Chen added.

Alcoa has been a leader in the development and integration of advanced aluminum alloys, vehicle structural design and advanced joining and assembly technologies for more than two decades. The company produces cast and extruded components for the Audi A8 aluminum space frame (ASF) in Germany and manufactures aluminum spaceframes for all Ferrari Gran Turismo vehicles in Italy.

The aluminum industry is projected to be greenhouse gas neutral by the year 2020 as a result of projected use in the transportation market. This means that the savings in greenhouse gas emissions from lighter weight, more fuel efficient vehicles will more than offset emissions generated when the metal is first produced.

"Yutong Bus Company looks forward to working with Alcoa to combine the best thinking of both companies to explore the opportunities that aluminum presents to develop a whole new family of 'Green' buses, not only for China but the world. This project shows Yutong and Alcoa as industry leaders in innovation and social responsibility," Mr. Yuxiang concluded.

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