30 June 2005

FIRST SALES ORDER FROM CHINA – A$1.2 million

Advanced Engine Components Limited ("AEC") is pleased to announce that it has received its first sales order from the Weifang Weichai Peterson Gas Engine Co. Ltd joint venture.

Weichai Power Company Ltd ("Weichai"), a party to the joint venture, has been established for over 50 years and specialises in the manufacture of high speed heavy duty diesel engines. Weichai is one of the largest diesel engine manufacturers in China with over 70% market share of the heavy duty engine market.

AEC signed a product development agreement on 13 September 2004. Under the agreement AEC will develop and supply components to adapt Weichai’s base heavy duty diesel engines, using AEC’s Natural Gas Vehicle System ("NGVS"), to run on Natural Gas ("NG").

The agreement originally applied to the application of AEC’s NGVS to enable Weichai’s 9.7 litre engine to run on both NG and LPG. This agreement has recently been amended to substitute the 9.7 litre LPG engine with a 6.2 litre NG engine. The 6.2 litre engine is used in the smaller city route buses which are far greater in number than the larger buses using the 9.7 litre engine.

Weichai’s first purchase order, received today, is for AEC NGVS kits for the 9.7 litre engine and NGVS kits for the smaller 6.2 litre engine. In excess of A$1.2 million revenue will be received by AEC upon delivery of the kits to Weichai.

Receipt of the sales order coincides with the delivery, to Perth, of Weichai’s base 9.7 litre engine and follows closely on the appointment of David Wang as AEC’s General Manager - China. All design work is complete and AEC will immediately install AEC’s NGVS on the base engine and commence testing on AEC’s dynamometer.

Weichai require both the 6.2 litre and 9.7 litre NG engines to be completed and available for the Beijing CIAEF 2005 (International Clean Vehicles Exhibition) in late September 2005. Delivery, of the first of the kits, is expected to commence soon after the Beijing Exhibition.

For further information please contact:
Tony Middleton – Managing Director on (08) 9209 6900;
Graham Keys – Chairman on (08) 9324 8555; or
Email: shares@advancedengine.com

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