China Auto Logistics Reports 2013 Results

Company Aims to Diversify Profits with a Used Car Business and Other Auto-Related Sales and Services Businesses Capitalizing on Potential of Anticipated New Free Trade Zone in Tianjin

China Auto Logistics 2013 Year End Investor Conference Call Scheduled for Friday, April 11th at 8:00am ET

China Auto Logistics Inc. (the "Company" or "CALI") (NASDAQ: CALI), a top seller in China of luxury imported automobiles, and a leading provider of auto-related services, reported today a lower year over year small profit for the year ended December 31, 2013, as it sought to maintain leadership in China's highly competitive luxury imported vehicle market. In a slower and more restrictive economic environment in 2013, the Company's luxury imported automobile sales declined approximately 22% and largely were of less profitable, lower end luxury vehicles.

Diversification and Free Trade Zone Potential

On a positive note, the Company saw fee income from Financing Services continue to grow despite slower auto sales. Most significantly, in the final months of the year, a key building block for diversifying into a potentially fast growing used car business as well as other auto related businesses was put into place, with the successful acquisition for $91.4 million on November 30, 2013 of Zhonghe Auto Sales Service Co., Ltd., which owns and operates the Tianjin Airport International Automall. The auto mall is in a prime location earmarked as one of the key sites in a proposed new Free Trade Zone (FTZ) in Tianjin, similar to the FTZ in Shanghai, which boosted real estate values and the value of companies located there. This followed an agreement in November with Car King China to launch Tianjin Car King Used Car Trading Company in which the Company has a 40% interest.

Mr. Tong Shiping, Chairman and CEO of the Company, stated, "While in 2013 we again absorbed the impact on our bottom line from competitive pricing in order to maintain leadership in our imported luxury auto business, I'm very pleased we succeeded in establishing a new leg for our business with significant long term growth potential. Used cars sales have become a much bigger slice of the auto sales pie in China, and we see a major opportunity for Car King Tianjin in the years ahead. It will take a while to build and measure our success with this new business as well as with our further possible diversification into higher margin retail auto sales. While we will continue to focus on expanding our existing auto-related services businesses and stabilizing auto sales margins, diversification will greatly strengthen our Company, position us well for new successes -- especially if the Tianjin FTZ comes to fruition -- and provide investors with new reasons for optimism about our future."

Financial Highlights

- 2013 revenues, which consisted primarily of luxury imported auto sales (98.30%), were $459,235,057, down 22.34% from $591,315,104 a year earlier, reflecting the year over year decline in Auto Sales.

- Gross profit margins in 2013 decreased to 1.49% from 1.90% in 2012, primarily reflecting a continuing decline in Auto Sales pricing in order to remain an industry leader against strong competition.

- Income from operations in 2013 was $2,929,747 compared with $3,582,194 a year earlier (including impairment changes for goodwill and intangible assets). The main contribution to income from operations came from Financing Services with operating income of $2,855,602 in 2013.

- Net income attributable to shareholders in 2013 was $524,260, or $0.14 per share, compared with $2,567,087, or $0.69 per share in 2012.

Operations Overview

Sales of Automobiles declined 22.56% from a year earlier to $450,143,413 in 2013. The decline in volume was 26.58%, as the Company sold 4,837 imported luxury automobiles during the year compared with 6,588 a year earlier. Average unit selling prices, however, increased year over year in 2013 by 6.82% to approximately $94,000. Nevertheless, most of the Company's auto sales were of lower end luxury models where demand was stronger. Profit margins on these vehicles are lower and were further impacted by the Company's desire to maintain its leading position against strong competition by offering customers the lowest possible prices. In addition to the slower economy, two key factors influenced the declining sales of imported automobiles during 2013. The first was the implementation by PRC Customs of unified inspection standards, which prolonged purchasing cycles and led to insufficient inventories to meet customer's needs. Additionally, the PRC Motor Registration Office began strict enforcement of rules resulting in required alterations to imported automobiles to obtain registration permits. The additional costs to customers entailed by these alterations reduced demand for imported automobiles beginning in the second quarter.

Going forward, the Company is aiming to stabilize gross margins in 2014. At the same time, a new austerity program for government officials in effect is likely to extend the competitive environment in luxury auto sales.

Financing Services growth was impacted by the issues affecting Automobile Sales. Nevertheless, revenue from fee income increased 17.39% over 2012 results to $4,356,061. Revenue from the interest portion of this business was lower than in 2012 due to lower prevailing interest rates. The Company also was able to take advantage of available credit lines provided by banks, and does not foresee any difficulty in obtaining additional credit lines and loan facilities from its banks. As of April 7, 2014, the Company had a credit line of approximately $159 million and is regularly in negotiations for new credit lines.

Airport Auto Mall Automotive Services contributed a negligible amount to 2013 results as the Airport Auto Mall had only one month of operations following its acquisition near year-end. The Company anticipates selling used cars through Car King Tianjin at the Airport Auto Mall, as well as leasing a portion of the facility. As of February 28, 2014, as previously announced, the Company's contract for managing the International Auto Mall in Tianjin was not renewed, and the Company will instead focus on developing the Airport Auto Mall.

Potential for Tianjin Free Trade Zone (FTZ)

Considerable excitement is building in Tianjin about the potential for it becoming the second major FTZ in China after the recent opening of the Shanghai FTZ. The Company's recently purchased Airport Auto Mall is in the area of Tianjin earmarked for the FTZ. If the pattern that emerged in Shanghai is followed in Tianjin, real estate values could increase and significant new business opportunities could be created.

Outlook

Commenting on the outlook for 2014 and beyond, Mr. Tong stated, "Near term, the Company will face continuing competition and softer demand for its luxury imported automobile business and, at the same time, does not anticipate generating meaningful results from the Airport Auto Mall and Car King Tianjin until at least the second half of the year. We also will be looking at higher interest costs in connection with the payment of the remaining installments of the purchase price for the Airport Auto Mall. We therefore anticipate comparisons will continue to be difficult through the first six months of 2014."

"However," he continued, "we believe that we have established a stronger company, with a more diversified base of operations that, in time, will be worth the expense and major effort we are putting into bringing our strategy to fruition - - and our goal is to be a leader in each new area we enter. As successful business managers for many years, we welcome the possible opening of a Free Trade Zone in Tianjin, and the freeing up of capital this could entail in China's second major port city which already is a major hub of commercial activity."

Conference Call Invitation

The Company will discuss 2013 year end results during a live conference call and webcast on Friday, April 11, 2014 at 8:00 am Eastern Time.

To participate in the call, interested participants should call 1-877-941-1427 when calling within the United States or 1-480-629-9664 when calling internationally. Please ask for the China Auto Logistics 2013 Year End Earnings Conference Call, Conference ID: 4678872. There will be a playback available until April 18, 2014. To listen to the playback, please call1-877-870-5176 when calling within the United States or 1-858-384-5517 when calling internationally. Use the Replay Pin Number: 4678872.

This call is being webcast by ViaVid Broadcasting and can be accessed by clicking on this link http://public.viavid.com/index.php?id=108683 or at ViaVid's website at http://viavid.com

SEE ATTACHED TABLES

About China Auto Logistics Inc.

China Auto Logistics Inc. is one of China's top sellers of imported luxury vehicles. It also provides a growing variety of "one stop" automobile related services such as short term dealer financing. Additionally, in November, 2013, it acquired the owner and operator of the 26,000 square meter Airport International Automall in Tianjin for $91.4 million, with plans to develop it, among other things, as the flagship site for a used car business, with Car King (China) Used Car Trading Co., Ltd.

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.