Vmoto Ltd : Vmoto secures Joint Venture into Brasil

• Vmoto to enter the Brazilian market through a Joint Venture ("JV"), to be named "E-Max do Brasil", with Riba Motos Industria e Comercio Ltda ("Riba") giving the Company access to an assembly facility with direct distribution to Latin America, the world's second fastest growing electric scooter market (Source: Pike Research)
• JV with Riba as local partner has significant cost savings for the Company compared to entering into this new market on its own
• Two years of preparations give Vmoto significant time advantages over any competitors
• First mover entry in electric scooters by a western firm into Brazil with a financial commitment of less than 200 scooters for Vmoto
• Brazil is the fifth largest motorcycle market in the world. Electric scooter fleets alone estimated to reach ~500,000 units by 2017 without taking into account any of the private market (Source: Crowe Horwarth)
• Six month trials with Correios (Brazilian Post) so far completed and discussions underway with other very significant motor, fleet and electric companies as well as local distributors and dealer networks in all the key Brazilian cities
Vmoto Limited (ASX:VMT, AIM:VMT), the global scooter manufacturing and distribution group specialising in electric powered scooters is pleased to announce that it has signed a joint venture agreement with Riba Motos Industria e Comercio Ltda in Brazil on a 70% (Riba) and 30% (Vmoto) basis.

The key terms of the JV are as follows:

• 70% (Riba), 30% (Vmoto) equity interest in a minimum 12 year joint venture to assemble, market and sell new E-Max electric vehicles, products, parts, accessories and engineering applications in Brazil as well as co-developing new models for Brazil and other worldwide markets.

• Vmoto's contribution - products or parts on a semi knocked down (SKD) or completely knocked down (CKD) basis, initially 50-200 units

• Riba's contribution - all importation costs & taxes, assembly, distribution, homologation,

operations, sales and marketing and aftermarket support

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• JV's assembly facility now being set up in in Varginha, Minas Gerais state with regional and federal government support

• 3 Vmoto senior management / board members to join board of the JV

• Gives the JV free trade access to other Latin American markets through trade agreements like

MERCOSUL

Riba (www.ribabrasil.com.br) is a Brazilian company founded in 2006 based in Sao Paulo, Brazil. It is a leading importer and distributor of new, innovative technology in the 2 wheel sector and has a long experience in assembly, sales, marketing and distribution in the Brazilian and wider Latin American markets.
Riba was most recently the distributor of LEM (Italy) motorcycles in Brazil, but has now moved its business 100% to E-Max electric scooters in Brazil focusing on B2B sales.
They have advanced market relationships in commercial and supply chain in Brazil. Strong prospects include CORREIOS (national post office of Brazil), Post Services in Chile, Uruguay, Costa Rica, Ecuador and Argentina. Other prospects in a similar filed are UPS, DHL and TNT. In the fast food business are two major players HABIB'S (biggest fast food chain in Brazil), DOMINO's Pizza. In the Public Service sector are CEMIG, CPFL and Public safety. Other key fleet segments will be rental companies (Riba offering 24 month leasing on the scooters) and security patrol companies (especially in gated communities which are ubiquitous).
RIBA also counts with strong state government support through reduced taxes and incentives for the establishment of JV and assembly lines in the chosen state (Minas Gerais). Reductions in import taxes on imported parts, sales state taxes in Minas Gerais and Federal taxes on industrialization and industrialized products.

By entering into the JV, Vmoto expect to be the first electric scooter company to supply to fleet customers in Brazil thereby entering into the world's 2nd fastest growing electric scooter market (described more below) for a nominal entry cost to the Company of less than 200 scooters.
No major electric 2 wheel manufacturer is yet present in Brazil and it can take at least 18 months to gain the import approvals and nationalise the products, something Riba and Vmoto have already completed.
Due to Brazilian requirements to protect its domestic motorcycle industry, the import tariffs on CBU (fully assembled) units make imports prohibitively expensive (around 160%). It is therefore essential to establish a local assembly plant with a local partner. Parts sent in complete knock down (CKD) format from outside Brazil also incur customs fees of around 100%, therefore parts must be provided at cost price and so a Joint Venture is the best route to market entry.
In addition, Brazil does not currently have a domestic electric vehicle industry and therefore the supply chain and expertise must come from outside the country. A manufacturer cannot also be a distributor and so it is doubly essential to have a strong local partner.
As stated in previous announcements, the Brazilian Postal Service (Correios) has been trialling 14 of Vmoto's electric delivery scooters for some time across 5 of their city operations. Correios (www.correios.com.br) is one of the largest state-owned companies in Latin America and is responsible for the national postal service of Brazil. It delivers to 50 million households across the country and Riba is negotiating with Correios to supply electric scooters to them to replace their existing petrol delivery fleet. Correios has publically declared that at least 50% of their 14,000 petrol
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motorbikes will be replaced with electric scooters by 2017 (Source: *SBT TV News interview with Managing Director of Correios, Sao Paulo State). The President of Correios, Mr Wagner Pinheiros, declared in March 2013 that moving to electric 2 wheels is one of Correios' 3 core strategies in future operations and that following the trials with Vmoto, an order will be placed before the end of this year (Quoted at European Postal Services Conference, Madrid, 12th March 2013 & Valor Ecônomico One, 17th April 2013). The relationship between Correios and Vmoto/Riba has been a close one. Our products are the only ones that have been tested to date and we jointly exhibited with them at the Post Expo Latin America in Brasilia 16-17th April 2013.
At this exhibition, South American postal services from Chile, Argentina, Uruguay, Costa Rica, Ecuador and Colombia showed interest in doing business with RIBA to acquire E-MAX electric scooters.

The Latin America market for electric scooters is expected to grow at a rate of 43% per year between
2011 and 2017, making it the 3rd largest global market, with 23 million units by 2017. Normal dealer
and private retail sales would be in addition. Latin America will be the second fastest growing market for electric vehicles between 2011 and 2017 after China (Source: Pike Research).
Brazil is the 5th largest motorcycle market in the world and exports to more than 60 countries.
The growth in fleet sales specifically in Brazil from 2001 to 2011 were at the worlds' fastest pace, 15%
for motorcycles and 18% for scooters (Source: ABRACICLO).
Brazilian fleets of electric scooters are expected to reach 185,000 units per annum by 2017 and to reach
495,000 in the more optimistic scenario according to research by Crowe Howarth.
The Brazilian government has stated on a national and state level for fleet owners to reduce their emissions by 20% by 2020 (Source: Valor Ecônomico One (Financial Times equivalent)). Additional political pressure comes ahead of the World Cup (2014) and Olympic Games (2016) which have both been marketed to be "green" events and to show Brazil's absolute dedication to maintaining its rich environmental assets.
According to RIBA, electric scooters offer running cost savings of up to 80% over their petrol equivalents with cost per km of $0.01.
Commenting on the JV with Riba, Michael Fulton, Vmoto's International Sales and Marketing manager, who has been working closing with Riba for over 12 months, said:
"After a long but necessary period of preparation and planning, I am delighted for Vmoto to be able to announce its entry into the Brazilian market through our JV agreement with Riba. Brazil is very much a 2 wheel market, the speed of growth as a country is astonishing and their commitment, especially from fleet owners, to using electric vehicles in the future is both commendable and offers Vmoto the clear route for making very significant sales. RIBA are an excellent partner to work with and I very much look forward to building our future successes together".
Also commenting on the JV, Island Faria de Costa, RIBA MOTO, Managing Director, said:
"The JV between RIBA and Vmoto is a breakthrough in commercial and industrial terms for both companies for the Brazilian and South American market. Joining forces reduces both time and costs, and takes advantage of the best of both companies - Vmoto's technical and industrial expertise along with Riba's knowledge of the Brazilian and South American Market. Our JV will benefit from credibility amongst governmental institutions and companies, as well as local suppliers and private companies. The Brazilian and South American market is booming with the potential of becoming one
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of the most important markets for electric vehicles waiting for the right players to make their stand. We are those players - companies in the right place at the right time."
AUTHORISED BY: Charles Chen Managing Director

For further enquiries, please contact:

Charles Chen, Managing Director

Olly Cairns, Non-Executive Director

+86 139 1338 8886

+61 (8) 6267 9030

Ed Frisby, Corporate Finance

Christopher Raggett, Corporate Finance

Tony Quirke, Corporate Broking

Vmoto is a global scooter manufacturing and distribution group and has been listed on the Australian Stock Exchange (ASX) since October 2001 and the AIM Market of the London Stock Exchange since November 2012. The Company specialises in high quality "green" electric powered scooters and manufactures a range of western designed electric (and some petrol) scooters from its low cost manufacturing facilities in Nanjing, China, marketed in Europe through its operation in Barcelona, Spain and marketed outside Europe through its operations in Australia. Vmoto combines low cost Chinese manufacturing capabilities with European design. The group operates through two primary brands: Vmoto (aimed at the value market in Asia) and E-Max (targeting the Western markets, with a premium end product). As well as operating under its own brands, the Company also sells to a number of customers on an original equipment manufacturer ("OEM") basis.

Vmoto E-max 120LD+ in daily use with Correios in Belo Horizonte, Mina Gerais state, Brazil

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Exhibiting Vmoto's products jointly with Correios, Post Expo Latin America, Brasilia, April 2013

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