Luxury Auto Sales Propel 78.3% Increase in China Auto Logistics (CALI) Q3 2012 Revenues

TIANJIN, CHINA — (Marketwire) — 11/14/12 — China Auto Logistics Inc. (the “Company”) (NASDAQ: CALI), a top seller in China of luxury imported automobiles, a leading provider of auto-related services and developer and operator of one of China’s leading automobile portals and three major auto-related websites, today reported it achieved substantial year over year revenue gains in the three-month and nine-month periods ended September 30, 2012.

Financial Highlights

• 2012 third quarter revenues grew 78.3% to $170,456,821 led by an 83.4% increase in Automobile Sales revenues to $168,360,743 and a 22% increase in Financing Services sales to $1,491,170.
• Net income attributable to shareholders in the 2012 third quarter was $1,517,549, or $0.41 per share on 3,693,912 diluted shares outstanding (reflecting the Company’s recent 1 for 6 reverse split). This compared with net income attributable to shareholders in the prior year period of $2,477,747 or $0.68 per share on 3,661,296 diluted shares outstanding. The decline is primarily attributable to a planned decrease in higher margin web-based advertising revenue which was not offset by gains achieved in the Company’s other high margin services businesses, or its lower margin automobile sales.
• In the nine months ended September 30, 2012, revenues grew to $427,950,375, up 41% from the prior year period, led by a 43.2 % year over year increase in Automobile Sales revenues.
• Net income attributable to shareholders in the first nine months of 2012 was $4,748,487or $1.29 per share on 3,693,912 diluted shares outstanding. This compared with $6,841,081 or $2.04 per share a year earlier on 3,351,414 diluted shares outstanding.

Growth Strategy

Mr. Tong Shiping, CEO and Chairman of the Company, stated, “We believe our growth strategy will have increasingly clear benefits over time. In essence, we are sacrificing our web-based advertising revenue and higher profits it might generate in the near term in order to create the opportunities that develop from being a much bigger company and the clear leader in China in luxury auto sales and auto related services. While focusing on the growth of our luxury auto sales we are also exploring opportunities for higher bottom line growth with new services as well as our existing auto-related services. The sharp jump in Auto Sales revenues in this year’s third quarter reflects well on our decision, as does the growth, in particular, of our Financing Services.”

Segment Review

The largest contributor in the third quarter to the Company’s revenues and profits was its luxury auto sales business. During the quarter the Company sold 2,004 automobiles, up 130% from 871 vehicles in the third quarter of 2011. The average unit price per sale was $84,012 in the 2012 quarter, down from $105,411 per unit in the third quarter last year. The Company continued to price its vehicles very competitively to expand its market share and maintain its leadership position in the industry. The contribution to operating income from Automobile Sales in the 2012 third quarter was $1,124,528 and was $3,777,411 through the first nine months of the year.

Revenues from Financing Services increased 22% year over year in the 2012 third quarter to $1,491,170. In order to provide financing to its customers, on which it earns a service fee, the Company utilizes bank facility lines of credit, provided by some of the leading commercial banks in China. As of September 30, 2012, the Company had approximately $60 million drawn on aggregate lines of approximately $119 million. The contribution to operating income from Financial Services in the quarter was $771,255, up from $426,417 in the same period last year.

As per the Company’s strategic decision, the contribution to operating income from web-based advertising services in the 2012 third quarter was reduced to $109,551 from $1,194,991 a year earlier. Other services businesses which contributed to profits in the quarter were Automobile Value Added Services and Auto Mall Management Services.

Outlook

Mr. Tong commented further, “Looking ahead we remain confident that we will maintain our leadership position in the luxury auto sales industry, with continued anticipated support from our automobile portal and websites which are now established in 50 cities throughout China and we intend to extend to 60 cities. Our aim is to capitalize on this leadership position with an expansion of our current high margin services and the addition of new ones. Underlying our growth strategy is our belief that growth rates for the high-end automobile market in China will continue to exceed those of the mainstream auto market, a view that is shared by several market forecasters.”

Conference Call Invitation

The company will discuss 2012 third quarter and nine month results during a live conference call and webcast on Thursday, November 15, at 8:00am ET.

To participate in the call, interested participants should call 1-877-941-8418 when calling within the United States or 1-480-629-9809 when calling internationally. Please ask for the China Auto Logistics 2012 Third Quarter Earnings Conference Call, Conference ID: 4575617. There will be a playback available until 11/22/12. To listen to the playback, please call 1-877-870-5176 when calling within the United States or 1-858-384-5517 when calling internationally. Use the Replay Pin Number: 4575617.

This call is being webcast by ViaVid Broadcasting and can be accessed by clicking on this link http://public.viavid.com/index.php?id=102530 or at ViaVid’s website at http://viavid.com.

About China Auto Logistics Inc.

China Auto Logistics Inc. is one of China’s top sellers of imported luxury vehicles, and also manages China’s largest imported auto mall in Tianjin. Additionally, it operates www.cali.com.cn, one of the leading automobile portals in China, as well as three major websites serving China’s auto dealers and their customers. The Company also provides a growing variety of “one stop” automobile related services such as short term dealer financing. Additional information about the Company is available at www.chinaautologisticsinc.com.

Information Regarding Forward-Looking Statements

Except for historical information contained herein, the statements in this press release are forward-looking statements that are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties, which may cause our actual results in future periods to differ materially from forecasted results. These risks and uncertainties include, among other things, product demand, market competition, and risks inherent in our operations. These and other risks are described in our filings with the U.S. Securities and Exchange Commission.

                          CHINA AUTO LOGISTICS INC.
           CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)

                           Three Months Ended          Nine Months Ended
                              September 30,              September 30,
                       -------------------------- --------------------------
                           2012          2011         2012          2011
                       ------------  ------------ ------------  ------------

Net revenue            $170,456,821  $ 95,613,591 $427,950,375  $303,998,137
Cost of revenue         167,673,580    91,356,637  418,587,823   291,609,816
                       ------------  ------------ ------------  ------------
    Gross profit          2,783,241     4,256,954    9,362,552    12,388,321
                       ------------  ------------ ------------  ------------

Operating expenses:
  Selling and marketing     287,372       364,738      715,762     1,103,381
  General and
   administrative           343,749       519,739    1,583,544     1,869,573
                       ------------  ------------ ------------  ------------
    Total operating
     expenses               631,121       884,477    2,299,306     2,972,954
                       ------------  ------------ ------------  ------------

Income from operations    2,152,120     3,372,477    7,063,246     9,415,367

Other income (expenses)
  Interest income           128,167        15,855      156,839        43,537
  Interest expense         (154,883)            -     (381,527)            -
  Loss on disposal of
   property and
   equipment                (12,719)            -      (84,793)            -
  Miscellaneous                   -        22,043         (114)       11,466
                       ------------  ------------ ------------  ------------
    Total other income
     (expenses)             (39,435)       37,898     (309,595)       55,003
                       ------------  ------------ ------------  ------------

Income before income
 taxes                    2,112,685     3,410,375    6,753,651     9,470,370

Income taxes                591,893       901,453    1,991,566     2,543,573
                       ------------  ------------ ------------  ------------

Net income                1,520,792     2,508,922    4,762,085     6,926,797

Less: Net income
 attributable to
 noncontrolling
 interests                    3,243        31,175       13,598        85,716
                       ------------  ------------ ------------  ------------

Net income attributable
 to shareholders of
China Auto Logistics
 Inc.                  $  1,517,549  $  2,477,747 $  4,748,487  $  6,841,081
                       ------------  ------------ ------------  ------------

Earnings per share
 attributable
 toshareholders of
 China Auto Logistics
 Inc.
  - basic and diluted  $       0.41  $       0.68 $       1.29  $       2.04
                       ------------  ------------ ------------  ------------

Weighted average number
 of common shares
 outstanding
  - basic and diluted     3,693,912     3,661,296    3,693,912     3,351,414
                       ------------  ------------ ------------  ------------

Contacts:

Sun Jiazhen
sjz_cali@126.com

Ken Donenfeld
DGI Investor Relations Inc.
kdonenfeld@dgiir.com
Tel: 212-425-5700