Highway Holdings Signs Cooperative Agreement with TURA AG to Produce Electro-Luminescent Panels; New Technical Applications for Highway Holdings.

Business Editors

HONG KONG--(BUSINESS WIRE)--Jan. 13, 2003

Highway Holdings Limited (Nasdaq:HIHO) today announced the signing of an agreement with TURA AG whereby TURA will purchase the company's electro-luminescent panels and have exclusive world-wide rights to market the back-lighting panels in the standard format paper sizes A-3 to A-0 for a three-year period.

"While the commercial rewards for the replacement of light box advertising units with electro-luminescent technology are significant and a key use, future commercial applications are potentially even greater. This includes applications for information display panels like computers and televisions screens," said Roland Kohl, chairman and chief executive officer of Highway Holdings.

"Electro-luminance was discovered a number of years ago, but the technology has only recently found wide-spread commercial applications. It is still in the early stages, requiring much more research and development to realize the technology's full potential. TURA's leadership position and technical experience in this field will be invaluable as we pursue the opportunities in this exciting market," Kohl said.

Kohl noted that over the past several years TURA has gradually developed its electro-luminance business, utilizing other European suppliers of EL panels and power source units. "Our reputation for high quality and low-cost manufacturing capabilities in China attracted the attention of TURA, which ultimately lead to the signing of this cooperative agreement," Kohl added.

An electro-luminescent panel is a thin, flexible, solid state, lighting device. It is powered by an electrical current, which reacts with a zinc-sulfide phosphor powder to produce a unique glow of light.

Highway Holdings said it expects to fill the first orders from TURA for electro-luminescent panels during the current fiscal quarter. "Although revenues from sales of such panels during the current fiscal year are expected to be modest, depending on TURA's success in marketing and distributing the panels, revenues during the balance of the three-year agreement could become significant," Kohl said.

He noted that TURA AG has been a long-time camera customer and a supplier of film to Highway Holdings' subsidiary Hi-Lite Camera Company Ltd and Kienzle Time Ltd.

Headquartered in Duren, West Germany and privately held since 1901, TURA AG supplies photographic films, papers, chemistry, and wide-format inkjet printing consumables to customers in more than sixty countries worldwide through a distribution network operating in forty countries. More information is available at tura-film.com.

Highway Holdings manufactures a wide variety of high-quality metal parts and components for blue chip original equipment manufacturers. It also manufactures clocks and clock movements for sale under the company's own Kienzle Uhren brand name, as well as for unaffiliated clock companies. Additionally, Highway Holdings manufactures finished products, including single-use and 35mm cameras and other products. The company is headquartered in Hong Kong and operates manufacturing facilities both in Shenzhen province of the People's Republic of China and in Bulgaria.

Except for the historical information contained herein, the matters discussed in this press release are forward-looking statements which involve risks and uncertainties, including but not limited to economic, competitive, governmental, political and technological factors affecting the company's revenues, operations, markets, products, prices, the revenue potential from its watch business, and other factors discussed in the company's various filings with the Securities and Exchange Commission, including without limitation the company's periodic and annual reports on Form 20-F.