Inheriting from Worlds Leading Technology Introduction of Lovol new factory May, 2011 Tianjin Lovol Engines Co., Ltd.

Inheriting from World’s Leading Technology

Introduction of Lovol new factory

May, 2011May, 2011

Tianjin Lovol Engines Co., Ltd.Tianjin Lovol Engines Co., Ltd.

ContentContent

I. General InformationI. General Information

II. Profile of the first stage projectII. Profile of the first stage project

III. Introduction of the advanced production technology and equipmentsIII. Introduction of the advanced production technology and equipments

IV. Our scheme for technology and R&DIV. Our scheme for technology and R&D

V. Application and performance V. Application and performance

VI. Products introductionVI. Products introduction

I. General informationI. General informationI. General informationI. General information1. Background

To meet stricter requirements for emission and consumption, develop more new products and increase marketing capacity, satisfy China’s new requirements and standards for vehicle engine’s function, energy consumption and emission, Our company planed and prepared to establish a brand new factory in the year of 2007.

2. Site of factory

Lovol new factory is located in Tianjin Beichen Science and Technology Industrial Park, which

is close to the outer-ring road, Jingji and Jingjintang freeway. It is about 20 kilometers far from

Tianjin South Railway Station (for goods transportation), 40 kilometers far from Tianjin sea port

which is one of the biggest in North of China, 16 kilometers from Tianjin International Airport,

and 110 kilometers from Beijing.

1. Background

To meet stricter requirements for emission and consumption, develop more new products and increase marketing capacity, satisfy China’s new requirements and standards for vehicle engine’s function, energy consumption and emission, Our company planed and prepared to establish a brand new factory in the year of 2007.

2. Site of factory

Lovol new factory is located in Tianjin Beichen Science and Technology Industrial Park, which

is close to the outer-ring road, Jingji and Jingjintang freeway. It is about 20 kilometers far from

Tianjin South Railway Station (for goods transportation), 40 kilometers far from Tianjin sea port

which is one of the biggest in North of China, 16 kilometers from Tianjin International Airport,

and 110 kilometers from Beijing.

I. General informationI. General informationI. General informationI. General information

3. Investment

The total construction of the new factory is scheduled to be finished in three stages with total

investment of 400 million US Dollars. The total investment of the first stage which has been

finished is 120 million US Dollars.

4. Area

Lovol new factory covers an area of 320,123 ㎡ ， including three complex workshops, R&D

center, office building, physical-chemical measuring building, public station, sewage disposal

station, dormitory and so on. It will be constructed by three stages with total building area of

148,804 ㎡ . The first stage project covers an area of 46,000 ㎡ .

3. Investment

The total construction of the new factory is scheduled to be finished in three stages with total

investment of 400 million US Dollars. The total investment of the first stage which has been

finished is 120 million US Dollars.

4. Area

Lovol new factory covers an area of 320,123 ㎡ ， including three complex workshops, R&D

center, office building, physical-chemical measuring building, public station, sewage disposal

station, dormitory and so on. It will be constructed by three stages with total building area of

148,804 ㎡ . The first stage project covers an area of 46,000 ㎡ .

The construction project of the first stage was begun in 2008 and has been finished by the end of 2010, total building area is 46000 ㎡ including complex workshops and other auxiliary public facilities.①office area (4000 ㎡ )②cylinder block line (11300 ㎡ , 100000 sets by three shifts)③assembly line (4600 ㎡ ,100000 sets by two shifts)④ testing line (3800 ㎡ , 100000 sets by two shifts )⑤painting line (1400 ㎡ , 100000 sets by two shifts )⑥ finishing line (600 ㎡ , 100000 sets by two shifts )⑦production material distribution area (3200 ㎡ , 100000 sets by two shifts )⑧ finished-products storage (3100 ㎡ )

The construction project of the first stage was begun in 2008 and has been finished by the end of 2010, total building area is 46000 ㎡ including complex workshops and other auxiliary public facilities.①office area (4000 ㎡ )②cylinder block line (11300 ㎡ , 100000 sets by three shifts)③assembly line (4600 ㎡ ,100000 sets by two shifts)④ testing line (3800 ㎡ , 100000 sets by two shifts )⑤painting line (1400 ㎡ , 100000 sets by two shifts )⑥ finishing line (600 ㎡ , 100000 sets by two shifts )⑦production material distribution area (3200 ㎡ , 100000 sets by two shifts )⑧ finished-products storage (3100 ㎡ )

II. Profile of the first stage projectII. Profile of the first stage projectII. Profile of the first stage projectII. Profile of the first stage project

Processing techniques and production system of the lines in our new factory were designed and built by taking domestically and globally advanced lines such as Cummins lines as the benchmark.

1 、 Machining workshop

The cylinder block line was totally invested 33million US Dollars. It occupies an area of 11300 ㎡ , it can produce totally 6 different models of cylinder block of B,D series. The annual

production capacity is 100,000 units by three shifts with totally 40 equipments.

Processing techniques and production system of the lines in our new factory were designed and built by taking domestically and globally advanced lines such as Cummins lines as the benchmark.

1 、 Machining workshop

The cylinder block line was totally invested 33million US Dollars. It occupies an area of 11300 ㎡ , it can produce totally 6 different models of cylinder block of B,D series. The annual

production capacity is 100,000 units by three shifts with totally 40 equipments.

III. Introduction of the advanced production technology and III. Introduction of the advanced production technology and equipmentsequipmentsIII. Introduction of the advanced production technology and III. Introduction of the advanced production technology and equipmentsequipments

The cylinder block line is composed by special automatic production line and processing center. Such key parts as cylinder bore , crankshaft bore etc. are processed by first level equipments that were imported from American and European countries, such as MAG (U.S.A), NAGEL (Germany). Processing center for Semi-finished machining was imported from MAZAK (Japan). All the main processing sections are equipped with automatic measuring tools and SPC analysis to track and monitor the processing quality.

The cylinder block line is composed by special automatic production line and processing center. Such key parts as cylinder bore , crankshaft bore etc. are processed by first level equipments that were imported from American and European countries, such as MAG (U.S.A), NAGEL (Germany). Processing center for Semi-finished machining was imported from MAZAK (Japan). All the main processing sections are equipped with automatic measuring tools and SPC analysis to track and monitor the processing quality.

Machining workshop picturesMachining workshop picturesMachining workshop picturesMachining workshop pictures

No. Equipment Name Equipment supplier Usage

1Finish machining

equipment (import)MAG,USA

Machining of cylinder hole and crankshaft hole

2 Honing machine NAGEL, Germany Machining of cylinder wall

3Computerized

Numerical Control Machine

MAZAK, Japan Turning, milling machining center

4Final washing

machineShanghai ABB Engineering

co., ltd ChinaCleaning the parts

5Finish machining

equipment (Home-made)

Changchun aikesailuo company,China

Machining of tappet hole

Annex ： equipments supplier listAnnex ： equipments supplier list

III. Introduction of the advanced production technology and III. Introduction of the advanced production technology and equipmentsequipmentsIII. Introduction of the advanced production technology and III. Introduction of the advanced production technology and equipmentsequipments

2. Assembly workshop The assembly workshop is invested 120 million RMB in total, occupies an area of 10400 ㎡ , includes four production lines --- assembly, test, painting and finishing, has annual production capacity of 100 thousand units, can produce Lovol B/D and 1000/1100 series in addition to 3, 4 and 6 cylinders diesel engines at the same time,

2. Assembly workshop The assembly workshop is invested 120 million RMB in total, occupies an area of 10400 ㎡ , includes four production lines --- assembly, test, painting and finishing, has annual production capacity of 100 thousand units, can produce Lovol B/D and 1000/1100 series in addition to 3, 4 and 6 cylinders diesel engines at the same time,

Assembly line is approximately 280 meters long, occupies an area of 4600㎡ , including 121 working stations totally.The assembly line widely adopted automatic and semi-automatic equipments, such as camshaft press-assembly machine, oil sump surface rubberizing robot, valve pat machine, automatic turning machine for cylinder block, crankshaft clearance measurement, piston projecting measurement and crankshaft turning moment measurement etc.

Assembly line is approximately 280 meters long, occupies an area of 4600㎡ , including 121 working stations totally.The assembly line widely adopted automatic and semi-automatic equipments, such as camshaft press-assembly machine, oil sump surface rubberizing robot, valve pat machine, automatic turning machine for cylinder block, crankshaft clearance measurement, piston projecting measurement and crankshaft turning moment measurement etc.

III. Introduction of the advanced production technology and III. Introduction of the advanced production technology and equipmentsequipmentsIII. Introduction of the advanced production technology and III. Introduction of the advanced production technology and equipmentsequipments

Assembly workshop picturesAssembly workshop picturesAssembly workshop picturesAssembly workshop pictures

Technical characteristics of assembly line

Excellent flexibility, can assemble 3,4 and 6-cylinder engines at the same time.

High automation

Strong quality control by processing

totally covered by information system

Technical characteristics of assembly line

Excellent flexibility, can assemble 3,4 and 6-cylinder engines at the same time.

High automation

Strong quality control by processing

totally covered by information system

III. Introduction of the advanced production technology and III. Introduction of the advanced production technology and equipmentsequipmentsIII. Introduction of the advanced production technology and III. Introduction of the advanced production technology and equipmentsequipments

Total area of testing line is 3800 ㎡ , totally 24 sets testing platforms. Such 22 engine parameters as engine speed, torque, power, fuel consumption rate, fuel temperature, oil temperature, intake and exhaust temperature, inter-cooled pressure and so on will be tested by the line.

Total area of testing line is 3800 ㎡ , totally 24 sets testing platforms. Such 22 engine parameters as engine speed, torque, power, fuel consumption rate, fuel temperature, oil temperature, intake and exhaust temperature, inter-cooled pressure and so on will be tested by the line.

Technology characteristic of engine testing line:

AVL smoke meter and high-precision fuel gauge.

RGV transmission, to achieve automated docking in desk frame, engine and tray.

Full range coverage of information system.

Technology characteristic of engine testing line:

AVL smoke meter and high-precision fuel gauge.

RGV transmission, to achieve automated docking in desk frame, engine and tray.

Full range coverage of information system.

III. Introduction of the advanced production technology and III. Introduction of the advanced production technology and equipmentsequipmentsIII. Introduction of the advanced production technology and III. Introduction of the advanced production technology and equipmentsequipments

Annex : Equipments supplier listAnnex : Equipments supplier list

S. NO. Production line Equipment supplier

1 Production line Dalian Haosen

2 Engine testing line Qidong Liantong

3 Coating and subsequent assembly line Shandong Gangzhijie

4 Equipment of assembly line alteration and storage line Dalian Haosen

5 Equipment of testing line for adjusting plan Qidong Liantong

6 Equipment of coating and subsequent assembly line for adjusting plan

Shandong Gangzhijie

III. Introduction of the advanced production technology and III. Introduction of the advanced production technology and equipmentsequipmentsIII. Introduction of the advanced production technology and III. Introduction of the advanced production technology and equipmentsequipments

Lovol technical center is the key project for the second-period construction. It has 11 sectors and 1 testing center, with a R&D team about 350 people.Technical center will build up 60 testing plants, be of complete environmental testing room, noise elimination room, parts testing measure room, engine testing plant, assembly testing plant, even road testing ground and testing process center, to meet National Standard requirements from process to testing.By the cooperation with domestic and world famous research organizations such as AVL, BOSCH, SWRI (American Southwest Academe), RICARD, Tianjin University and Tianjin Industrial University, Lovol will be capable of R&D plants of numeric design, simulation analysis, combustion emission development, NVH development and reliability & endurance testing, meanwhile the production plants will cover diesel, gasoline and substitute fuel engines.

Lovol technical center is the key project for the second-period construction. It has 11 sectors and 1 testing center, with a R&D team about 350 people.Technical center will build up 60 testing plants, be of complete environmental testing room, noise elimination room, parts testing measure room, engine testing plant, assembly testing plant, even road testing ground and testing process center, to meet National Standard requirements from process to testing.By the cooperation with domestic and world famous research organizations such as AVL, BOSCH, SWRI (American Southwest Academe), RICARD, Tianjin University and Tianjin Industrial University, Lovol will be capable of R&D plants of numeric design, simulation analysis, combustion emission development, NVH development and reliability & endurance testing, meanwhile the production plants will cover diesel, gasoline and substitute fuel engines.

IV. Our scheme for technology and R&DIV. Our scheme for technology and R&DIV. Our scheme for technology and R&DIV. Our scheme for technology and R&D

Truck

Engineer Truck

Intercity Bus

City Bus

Agricultural Equipment

Generator Set

Construction Machinery

Mining Machinery

Marine Auxiliary

Marine Main Engine

IV. Application and performanceIV. Application and performanceIV. Application and performanceIV. Application and performance

Medium 、 heavy duty truck

系 系

Engineer truck

系

系

系

Light duty truck

City/Intercity bus

Agricultural equipment (Tractor)

Agricultural equipment (Harvester)

Generator set

…

Construction machinery (Loader)

Construction machinery (Excavator)

Construction machinery （ Else）

Mining machinery

Lovol engines’ teams won the first and

second place in the first race of “2008

Chinese Truck Race”

Lovol Engines awarded “The Most Reliable

Engine” title in “Le Mans Light Truck

Endurance Race ”

Excellent PerformanceExcellent Performance

Lovol Phaser 100T engine powered aircraft

tractor which made by Qingdao special vehicle

factory ,it was designated as dedicate engine by

Chinese Military.

Auman medium duty trucks powered by Lovol

6B210 engine were selected to be military

specified products.

Generator set powered by Lovol engines

serviced for Bird's Nest during 2008 Beijing

Olympic Games , to make sure the safety of

entry.

“New look of Binhai” float with Lovol engine

presented at military parade of China 60th

anniversary

Lovol Generator Engines Stably Running Lovol Generator Engines Stably Running 17742 hours in Saudi Arabia. hours in Saudi Arabia.

Lovol engines withstand -40 cold climate in ℃

Russia. Sales volume was 3000 units in the

first marketing year, and has reached 15000

units totally.

Lovol engines well run under desert climate

such as 40 -50 high temperature and ℃ ℃

dry weather condition in Iran.

2. Introduction of generating engines with in-line pump

Parameter for in-line pump engine

No. Item 1003G 1003TG 1004G 1004TG 1006TG1A 1006TG2A 1006TAG

1Continuous Power

KW/r/min

28/1500 44/1500 40/1500 65.7/1500 84/1500 92/1500 121/1500

30/1800 50/1800 44/1800 75.6/1800 97/1800 108/1800 134/1800

2Standby Power

KW/r/min

30.8/1500 48/1500 44/1500 72.3/1500 93/1500 102/1500 134/1500

33/1800 55/1800 48/1800 83.2/1800 107/1800 119/1800 147/1800

3 Governing Rate Mechanical Governor（≤ 5%）、 Electronic Governor（≤ 1%）GAC

Governor（≤ 1%）

No. Item 1003G1A 1003TG1A 1004TG1A 1006TG3A 1006TAG1A 1106C-P6TAG

1Continuous Power

KW/r/min

26/1500 38/1500 52/1500 86/1500 108/1500 133/1500

28/1800 42/1800 58/1800 100/1800 121/1800 150/1800

2Standby Power

KW/r/min

28.6/1500 42/1500 57/1500 94.6/1500 119/1500 146/1500

30.8/1800 46/1800 64/1800 110/1800 133/1800 175/1800

3 Governing Rate GAC Governor（≤ 1%）

Remark ： Model Code“1106C-P6TAG”, letter“C” represent Stage 2 emission, letter“P” represent in-line pump。

VI. Introduction of engines for generator set and water pumpVI. Introduction of engines for generator set and water pumpVI. Introduction of engines for generator set and water pumpVI. Introduction of engines for generator set and water pump

Large density of power

Low fuel consumption

Good appearance

High Price/performance ratio

Good cold start performance—can be well started

at -10 without pre-heater, -25 through the ℃ ℃

flame pre-heat cold start aid, and with -40 start ℃

solution.

Reliability

Except the fuel system, the structure and

parameter is almost same as Perkins 1000 series

engines.

Characteristics and advantages (in-line pump products) :

Parameter for STANADYNE pump engine

No. Item 1003G 1003TG1003C-3TAG1A

1003C-3TAG2A

1004G 1004TG1004C-4TAG1A

1004C-4TAG2A

1006TG1A

1006TG2A

1006TAG

1Con.PowerkW/r/min

28/1500 44/1500 42/1500 46/1500 40/1500 65.7/1500 67.5/1500 74/1500 84/1500 92/1500 121/1500

30/1800 50/1800 - - 44/1800 75.6/1800 - - 97/1800108/180

0134/1800

2Sta.PowerkW/r/min

30.8/1500 48/1500 46/1500 50/1500 44/1500 72.3/1500 74/1500 81/1500 93/1500102/150

0134/1500

33/1800 55/1800 - - 48/1800 83.2/1800 - -107/180

0119/180

0147/1800

3Fuel Cons. g/(kW·h)

≤218 ≤210 ≤210 ≤210 ≤218 ≤210 ≤210 ≤210 ≤210 ≤210 ≤210

4Governing

RateMechanical Governor（≤ 5%）

GACGovernor（≤ 1%）

5 Emission Stage I Stage I Stage II Stage II Stage I Stage I Stage II Stage II Stage I Stage I Stage I

3. Introduction of power generation （ STANADYNE rotary pump）

Remark:Model Code“1003C-3TAG”, letter“C” represent Stage 2 emission.

Low fuel consumption

Good appearance

Large density of power

Good cold start performance—The engine can be easily started at -25 with aid of flame preheating ℃

device.

Low noise and vibration level

Good reliability and stability

High Price/performance ratio

Wide maintenance service —STANADYNE’s worldwide service system supports the engines’ service .

Absolutely inherited the advanced technology and classic appearance design of Perkins 1000 series

engines for generating sets.

Characteristics and advantages (STANADYNE pump products):Characteristics and advantages (STANADYNE pump products):

Parameters of common rail engines ( Tier3,1800r/min）

No. Model 1004D-E4TAG 1006D-E6TAG

1Continuous power

kW/1500rpm68 74 84 97 112 122 129

2Standby power kW/1500rpm

75 81 92 107 123 134 142

3Continuous power

kW/1800rpm71 82 87 105 113 117 119 131 144

4Standby power kW/1800rpm

78 90 96 115 124 129 131 144 158

5 Governing rate Electronic Governor（≤ 1%）

4. Introduction of power generation （ Common Rail products ） :

Remark:Model Code“1004D-E4TAG”, letter“D” represent Stage IIIA /Tier 3 emission level,Letter“E”represent Electronic Control High Pressure Common Rail route.

Euro Stage IIIA

EPA Tier3

High quality electricity

Ultra-low fuel consumption—Adopting world advanced high pressure common rail and four-valve

technology route ， the fuel consumption is 5% lower than those engines with in-line fuel pump.

Good cold start performance—The engine can be smoothly started up at -35 with aid of grid-type ℃

electric preheating device. Moreover, it has measurements for start-up at -40 .℃

Little vibration and low noise

Good stability & Reliability—Adopting world advanced four-valve technology and Bosch electronic

control fuel supply system, the engine’s function becomes more stably and reliably.

Wide maintenance service —BOSCH’s worldwide service system supports the engines’ service .

Low emission — The engine’s emission can meet Euro Stage IIIA and EPA Tier 3 legislations of

developed countries.

Characteristics and advantages (Common Rail products):Characteristics and advantages (Common Rail products):

Engine model 1004NG 1006NG 1006-G6TAG

Fuel Pipeline Natural Gas

Induction System Naturally Aspirated TurbochargedGoverning Rate < 3% < 3% ≤ 1%

Rated Power1500r/min 30kW 40kW 82kW

1800r/min 35kW 45kW 95kW

Standby Power

1500r/min 33kW 42kW 90kW

1800r/min 38kW 47kW 105kW

Exhaust Temperature (Before/After Turbo)

≤750 ℃ ≤750℃ ≤700 ℃

Pipeline Natural Gas Engine for Generator Sets

5. Introduction of power generation (Natural Gas Engine)

Remark ： The letter N in the engine model“1004NG”means“fuel type is natural gas” (first stage emission standard). The letter G (first letter) in the engine model“1006-G6TAG”means“fuel type is natural gas ”(second stage emission standard and above).

Low requests to the gas pressure, mainly using the pipeline natural gas and the low

pressure natural gas ； High environmental adaptability.

Fuel economy——In Nature gas-rich area, the use cost is much lower than that of diesel

generating set. The improvement of fuel economy is obvious.

Small vibration, low noise——Softer combustion, lower vibration noise.

The engine speed can be switched between 1500rpm and 1800rpm freely by the

calibration software.

The key parts and components are all purchased from world famous suppliers, such as,

the electronic throttle controller and mixer of Woodward company (USA brand) , ignition

plug of NGK company (Japan brand), electronic ignition system of Jiangsu Huidong

company (Delphi technology).

Characteristics and advantages (Natural Gas Engine ):Characteristics and advantages (Natural Gas Engine ):

6. Introduction of power generation （ Marine Auxiliary Diesel Engine） In order to enlarge the product range, we exploit Marine Auxiliary Diesel Engine with

mechanical pump + electronically controlled technology, the power range is from 40kW to

110kW. Our marine engines meet China Classification society CCS certificate, and has

batch quantity for sales。

Remark ： Model“1004GM”,Letter“M” represent “Marine”.

China Classification society CCS certificate

China Classification society CCS certificate

Model 1004GM 1004TGM 1006TGM 1006TWGM

Induction Natural Turbocharged TurbochargedTurbocharged

and inter-cooled

Rated power （ 1500r/min） 40kW 60kW 90kW 110kW

Governor & governing rate Electronic governor≤1%

seawater as the cooling medium of heat exchange system. Fan and radiator are replaced by seawater pump and heat exchanger, and adapt marine environment.

Double fuel pipe structure for the fuel route system, while add fuel route alarm device, to assure if rust, leak or broken happen in and out of high pressure fuel route, fuel won’t spurt and the device will alarm timely.

High protection and safety. External rotary and high temperature parts are shielded. Double-line design for all electric component. External parts have rust prevention for working on the sea against corrosive and wet air ,

and add shield to prevent electric component against fog corrosion.

Characteristics and advantages （ Marine Auxiliary Diesel Engine ） :

Performance parameter of water pump engine

No. Item 1003-3TZ 1004-4Z 1004-4TZ 1006-6TZ 1006-6TAZ

1Continuous power

kW/r/min

- 40/1500 65.7/1500 92/1500 121/1500

45/1800 44/1800 75.6/1800 108/1800 134/1800

- 50/2200 75/2200 92/2200 135/2200

2 Fuel consumption g/(kW·h) - ≤218 ≤210 ≤210 ≤210

3 Governor & governing rate Mechanical governor≤10%

7. Introduction of water pump

Remark: Model Code“1003-3TZ”,letter“Z”represent“Other model”, here refer in particular to “Engines for water pump s”.

Components of engines have high performance.

According to the demands of customer, we can offer various configuration.

To meet controlling demand, we can provide engines with control box, and offer clutch

with belt wheel as well , drive many kinds of devices.

Low governing rate and stable flow rate.

Characteristics and advantages (Water pump Engine ):Characteristics and advantages (Water pump Engine ):

8. World famous supplier

Tappet Tappet

TurbochargerTurbochargerCommon rail technology

and injection

Common rail technology

and injectionBYC fuel pump/

Hengyang fuel pump/

Piston ring

BYC fuel pump/

Hengyang fuel pump/

Piston ring

Liner/ piston/ cylinder head gasketLiner/ piston/ cylinder head gasket

Rotary fuel pump Rotary fuel pump Fuel filter on common rail enginesFuel filter on common rail engines

SolenoidSolenoid

Filter Filter ValveValve

MotorMotor

jointjointTurbocharger on EU II Generator engineTurbocharger on EU II Generator engine