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Joint Venture for Production of Automobile Body Seals in Tianjin

July 17, 2000

Regarding the proposed capital participation of Toyoda Gosei Co., Ltd. (president: Tokio Horigome; hereafter "Toyoda Gosei") in TIANJIN STAR LIGUT RUBBER AND PLASTIC CO., LTD., an affiliate ofKINUGAWA RUBBER INDUSTRIAL CO.,LTD (president: Toshihiko Sekine), in a joint venture to produce automobile body seals, Toyoda Gosei has conferred with KINUGAWA RUBBER INDUSTRIAL CO.,LTD and with TIANJIN AUTOMOTIVE INDUSTRIAL (GROUP) CO.,LTD. and DESIRE STAR RUBBER & PLASTIC LIMITED, both capital participants in TIANJIN STAR LIGUT RUBBER AND PLASTIC CO., LTD., and reports that the following items have been agreed upon.

1. Background to Toyoda Gosei's capital participation in joint venture

1-1.
For some time, Toyoda Gosei has been considering expanding into the Chinesemarket its operations in the area of automobile seals, one of the areas in which Toyoda Gosei is known for products of world-leading quality. Regarding the supply of Toyota small-vehicle seals planned for production through a joint enterprise with Toyota Motor Corporation, Toyoda Gosei was approached by TIANJIN AUTOMOTIVE INDUSTRIAL (GROUP) CO.,LTD with a request to make a capital contribution to TIANJIN STAR LIGUT RUBBER AND PLASTIC CO., LTD., currently the manufacturer of body seals for Daihatsu Charades produced at TIANJIN AUTOMOTIVE INDUSTRIAL (GROUP) CO.,LTD, and to manufacture and supply seal parts for Toyota vehicles. Toyoda Gosei considered the feasibility of such participation.

1-2
Based on the abovementioned request, deliberations made in consultation with KINUGAWA RUBBER INDUSTRIAL CO.,LTD, TIANJIN STAR LIGUT RUBBER AND PLASTIC CO.,LTD, TIANJIN AUTOMOTIVE INDUSTRIAL (GROUP) CO.,LTD and DESIRE STAR RUBBER & PLASTIC LIMITED resulted in a basic agreement being reached.

2. Framework of agreement

2-1. Details of stock transfer
KINUGAWA RUBBER INDUSTRIAL CO.,LTD, which holds a 52% share in TIANJIN STAR LIGUT RUBBER AND PLASTIC CO.,LTD, shall transfer 10% to Toyoda Gosei. Joint stockholder DESIRE STAR RUBBER & PLASTIC LIMITED shall transfer all of its 30% share in TIANJIN STAR LIGUT RUBBER AND PLASTIC CO.,LTD to Toyoda Gosei.

2-2. Breakdown of contributions

  (Before TG inv't) (After TG's inv't)
TIANJIN AUTOMOTIVE INDUSTRIAL (GROUP) CO.,LTD. 18% 18%
DESIRE STAR RUBBER & PLASTIC LIMITED 30% 0%
KINUGAWA RUBBER INDUSTRIAL CO.,LTD 52% 42%
Toyoda Gosei 0% 40%


2-3. Amount of contribution: approx. 560 million yen

2-4. Start of operations
Preparations under way are aimed at a September 2000 start.