Composite Automobile Research Ltd. China Update.

Business Editors/Automotive Writers

EL CAJON, Calif.--(BUSINESS WIRE)--May 11, 2000

Composite Automobile Research Ltd. (OTCBB:CARH)(POH:Frankfurt), through its wholly owned subsidiary World Transport Authority (WTA), Thursday issued the following update for shareholders of the company regarding China and the company's plans to initiate operations in that country.

Since the inception of the concept for the WorldStar vehicle and its marketing and distribution plan 4 1/2 years ago, WTA has targeted China as one of the major markets for the company. Recognizing China's need for the WorldStar vehicle and its unique manufacturing process, WTA has formulated a comprehensive philosophy regarding its entrance into this huge and potentially lucrative market. Many generous and well-thought-out proposals regarding the purchase of the Master License for the country of China have been presented to WTA by numerous groups of individuals, as well as several companies interested in the opportunity to develop the massive Chinese market in conjunction with WTA. To date, the company, although tempted to close on several of these very good proposals has, after careful consideration, declined to do so.

Company Chairman and Chief Executive Officer Lyle Wardrop has stated on numerous occasions, "China represents the largest market to be taken on by the company. It is extremely important that our timing for entering the Chinese market is correct. It is also most important that once we commit ourselves the partners we choose are impeccable, and that they have extensive experience doing business in the Chinese automobile and automotive industry. Anything short of this could be a recipe for failure." For these reasons the company has taken a cautious approach to the development of its business model for China.

To this end, the company announced that it has entered into a series of agreements with a company who has extensive automobile and automotive industry experience in the country of China. Overriding the agreements at this time is a confidentiality agreement entered into by WTA and the prospective purchaser of the Master License for China. This confidentiality agreement currently prohibits WTA from divulging the prospective purchaser's name. To date, the company can state that they have entered into a Letter of Agreement with certain parties, regarding the purchase of the Master License. Key to the Letter of Agreement is a provision that a process of due diligence be conducted by both WTA and the prospective purchaser. As this Letter of Agreement was signed on April 27, 2000, WTA can emphatically state that this process has begun and is well under way by both parties.

Prior to and including a visit by the Chinese group to WTA's facilities on April 27, 2000, senior management for the group had visited WTA's offices and facilities on four separate occasions for due diligence purposes. Exclusive of these visits both parties have exchanged voluminous documentation with each other through technical representatives of their respective companies. Key among many issues necessary for this transaction to close will be the inspection of the Chinese company's operations in China by officials of WTA. This inspection process has now become a scheduling matter under consideration by both parties. WTA anticipates that schedules will be addressed in the immediate future, at which time WTA will dispatch senior personnel to China, for intended inspection purposes. As WTA deems it to be prudent and as they are contractually permitted to do so, full details of these transactions will be released via company news release.

Composite Automobile Research LTD and World Transport Authority Inc. serve the emerging world's transportation needs through in country manufacturing facilities, utilizing local semi-skilled labour to produce the WorldStar line of utility vehicles.

This press release contains forward-looking statements within the definition of Section 27A of the Securities Act of 1933, as amended and such section 21E of the Securities Act of 1934, amended. These forward-looking statements should not be used to make an investment decision. Refer to the WTA Web site at www.WTAWorldstar.com and other sources for more detailed information. Investor Relations is at 619/387-8888.