SORL Auto Parts Reports First Quarter of 2008 Financial Results

                Revenue Grows 26% and Net Income Grows 68%

  First Quarter Financial Highlights

  -- Revenue increased 25.6% year-over-year to US$30.7 million

  -- Gross profit margin increased to 28.2% compared with 23.3% a year ago

  -- Net income rose 68.0% year-over-year to US$3.5 million; diluted EPS
     increased to US$0.19 from US$0.11 a year ago



ZHEJIANG, China, May 14 /Xinhua-PRNewswire-FirstCall/ -- SORL Auto Parts, Inc. (NASDAQ:SORL) ("The Company"), a leading manufacturer and distributor of commercial vehicle air brake valves as well as related auto parts in China, announced today financial results for the first quarter ended March 31, 2008.

First Quarter Results

Revenue for the first quarter of 2008 was US$30.7 million, a 25.6% increase as compared to US$24.4 million for the same period in 2008. Revenues from China's domestic OEM market, China's domestic aftermarket and international markets for the first quarter of 2008 were US$10.7 million, US$9.9 million and US$10.1 million, respectively. All three segments grew significantly, though overall growth was slowed somewhat by the snow storms that paralyzed parts of China in January and February and seriously affected transportation and supply chains in central and east China.

Gross profit for the first quarter of 2008 was US$8.6 million, a 51.9% increase as compared to US$5.7 million for the same period in 2007. Gross profit margin reached 28.2% compared with 23.3% in the same quarter last year, an increase of 490 basis points.  The improved gross margin was the result of several factors including increased prices on certain products, the introduction of improved models which command higher margins, increased sale of systems (as opposed to individual components) which command higher margins, and improved manufacturing efficiency.

Operating expenses increased 38.6% from $3.0 million in the first quarter of 2007 to $4.2 million in the first quarter of 2008.  As a percentage of revenue, operating expenses increased from 12.4% in the first quarter of 2007 to 13.7% in the first quarter of 2008 primarily as a result of foreign currency losses related to the depreciation of the US dollar versus the Chinese currency and an approximately 100% increase in research and development expenses related to developing electronic truck parts.

Operating income increased 66.9% or $1.8 million from $2.7 million in the first quarter of 2007 to $4.5 million in the first quarter of 2008.  Operating margin increased 360 basis points from 10.9% in the first quarter of 2007 to 14.5% in the first quarter of 2008 as a result of the increase in gross margin slightly offset by the increase in operating expenses as a percent of revenue.

Net income increased 68% or $1.4 million from $2.1 million in the first quarter of 2007, or $0.11 per share, to $3.5 million in the first quarter of 2008, or $0.19 per share.  Net margin increased 290 basis points from 8.6% in the first quarter of 2007 to 11.5% in the first quarter of 2008.

"We are very pleased with our financial performance in the first quarter of 2008," said Xiaoping Zhang, SORL Auto Parts' CEO and Chairman.  "Top line growth was strong across all of our market segments despite difficult conditions in China due to severe snow storms and the related transportation problems. As we entered 2008, while we remained committed to growing our business, we also decided to place greater emphasis on improving efficiency and profitability. During the first quarter of 2008, our gross margin improved by almost 5% demonstrating the success we are having relative to this goal, particularly as relates to improving manufacturing productivity and bringing higher margin products and systems to market.  We will continue to work toward this goal and are confident these efforts will help us continue to improve our competitiveness and financial performance in the future."

Management will host a conference call at 8:00 am ET on Wednesday, May 14, 2008.  Listeners may access the call by dialing #913-981-5529. A live webcast of the conference call will also be available at http://www.viavid.net/ .  A replay of the call will be available from May 14, 2008 to June 3, 2008. Listeners may access the replay by dialing 719-457-0820; passcode: 2438044.

About SORL Auto Parts, Inc.

As China's leading manufacturer and distributor of automotive air brake valves, SORL Auto Parts, Inc. ranks first in market share in the segment for commercial vehicles weighing more than three tons, such as trucks and buses. The Company distributes products both within China and internationally under the SORL trademark. SORL ranks among the top 100 auto component suppliers in China, with a product range that includes 40 types of air brake valves and over 1000 different specifications. The Company has four authorized international sales centers in Australia, United Arab Emirates, India, and the United States, with additional offices slated to open in other locations in the near future. For more information, please visit http://www.sorl.cn/ .

Safe Harbor Statement

This press release may include certain statements that are not descriptions of historical facts, but are forward-looking statements. Forward-looking statements can be identified by the use of forward-looking terminology such as "will", "believes", "expects" or similar expressions. These forward-looking statements may also include statements about our proposed discussions related to our business or growth strategy, which is subject to change. Such information is based upon expectations of our management that were reasonable when made but may prove to be incorrect. All of such assumptions are inherently subject to uncertainties and contingencies beyond our control and upon assumptions with respect to future business decisions, which are subject to change. We do not undertake to update the forward-looking statements contained in this press release. For a description of the risks and uncertainties that may cause actual results to differ from the forward-looking statements contained in this press release, see our most recent Annual Report filed with the Securities and Exchange Commission (SEC) on Form 10-K, and our subsequent SEC filings. Copies of filings made with the SEC are available through the SEC's electronic data gathering analysis retrieval system (EDGAR) at http://www.sec.gov/ .

                   SORL Auto Parts, Inc. and Subsidiaries
                         Consolidated Balance Sheets
                    March 31, 2008 and December 31, 2007

                                            31-Mar-08           31-Dec-07
                                           (Unaudited)          (Audited)
                  Assets
  Current Assets
   Cash and Cash Equivalents             US$  2,732,810   US$    4,340,211
   Accounts Receivable, Net of Provision     35,854,111         30,586,239
   Notes Receivable                          10,434,941          9,410,385
   Inventory                                 11,083,242          8,220,373
   Prepayments                                2,530,131          1,336,212
   Other current assets, including $0
    and $1,761,007 from related
    parties at March 31, 2008 and
    December 31, 2007, respectively           2,056,025          4,275,294
        Total Current Assets                 64,691,260         58,168,714
  Fixed Assets
   Property, Plant and Equipment             29,592,712         27,889,182
   Less: Accumulated Depreciation            (6,927,803)        (6,094,229)
       Property, Plant and Equipment,
       Net                                   22,664,909         21,794,953

  Land Use Rights, Net                       14,374,566         13,889,705

  Other Assets
   Deferred compensation cost-stock
    options                                      54,662             69,571
   Intangible Assets                             79,889             76,150
   Less: Accumulated Amortization               (28,102)           (25,116)
         Intangible Assets, Net                  51,788             51,034
         Total Other Assets                     106,450            120,605
   Total Assets
                                         US$101,837,185   US$   93,973,977

  Liabilities and Shareholders' Equity

  Current Liabilities
   Accounts Payable and Notes Payable,
    including $3,120,968 and $97,503
    due to related parties at March 31,
    2008 and December 31, 2007,
    respectively                         US$  7,417,133   US$    5,305,172
   Deposit Received from Customers            2,657,046          2,079,946
   Short term bank loans                      1,025,511          3,370,328
   Income tax payable                           513,673            373,769
   Accrued Expenses                           2,030,046          1,859,938
   Other Current Liabilities                    387,490            463,563
        Total Current Liabilities            14,030,899         13,452,716
  Minority Interest                           8,754,160          8,024,152
  Shareholders' Equity
   Common Stock - $0.002 Par Value;
    50,000,000 authorized, 18,279,254
    issued and outstanding as of
    March 31, 2008 and December 31, 2007
    respectively                                 36,558             36,558
   Additional Paid In Capital                37,498,452         37,498,452
   Statutory Reserves                         2,237,597          1,882,979
   Accumulated other comprehensive
    income                                    8,456,090          5,432,189
   Retained Earnings                         30,823,429         27,646,931
                                             79,052,126         72,497,109
   Total Liabilities and Shareholders'
    Equity                               US$101,837,185   US$   93,973,977




                   SORL Auto Parts, Inc. and Subsidiaries
                     Consolidated Statements of Income
          For The First Quarter Ended on March 31, 2008 and 2007


                                              Three Months Ended March 31,

                                                   2008          2007

  Sales                                    US$   30,658,442    24,416,989
     include: sales to related parties              817,918       914,683

  Cost of Sales                                  22,016,581    18,726,052

  Gross Profit                                    8,641,861     5,690,937

  Expenses:
       Selling and Distribution Expenses          1,839,275     1,183,647
       General and Administrative Expenses        1,976,201     1,693,187
       Financial Expenses                           369,676       143,168
       Total Expenses                             4,185,152     3,020,002

  Operating Income                                4,456,709     2,670,935


  Other Income                                      111,078        32,340
  Non-Operating Expenses                            (79,178)       (4,089)

  Income (Loss) Before Provision for
   Income Taxes                                   4,488,609     2,699,186

  Provision for Income Taxes                        563,474       362,465

  Net Income Before Minority Interest
        & Other Comprehensive Income       US$    3,925,135     2,336,721

  Minority Interest                                 394,019       235,189

  Net Income Attributable to
   Shareholders                                   3,531,116     2,101,532

  Foreign Currency Translation
   Adjustment                                     3,359,890       621,941

  Minority Interest's Share                         335,989        62,194

  Comprehensive Income (Loss)                     6,555,017     2,661,279


  Weighted average common share -
   Basic                                         18,279,254    18,275,126

  Weighted average common share -
   Diluted                                       18,290,126    18,333,009

  EPS - Basic                                          0.19          0.11

  EPS - Diluted                                        0.19          0.11


DATASOURCE: SORL Auto Parts, Inc.



CONTACT: Richard Cai, Director of Investor Relations at SORL Auto Parts,

Inc., [phone], or ; Dan Joseph of ICR, Inc.,

[phone], or ; Bill Zima of ICR, Inc., +1-203-

682-8200, or , all for SORL Auto Parts, Inc.



Web site: http://www.sorl.cn/

http://www.viavid.net/ 

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