U.S. ARMY SIGNS COOPERATIVE RESEARCH AND DEVELOPMENT AGREEMENT WITH PERMO-DRIVE TECHNOLOGIES LTD.

WASHINGTON, D.C., --- Permo-Drive Technologies Ltd. has signed a cooperative research and development agreement with the U. S. Armys National Automotive Center to evaluate hybrid-hydraulic driveline systems for military and commercial applications, according to Max Bosotti, Permo-Drives chief executive officer.

For Immediate Release

U.S. ARMY SIGNS COOPERATIVE RESEARCH AND DEVELOPMENT AGREEMENT WITH PERMO-DRIVE TECHNOLOGIES LTD.

   WASHINGTON, D.C. -- Permo-Drive Technologies Ltd. has signed a cooperative research and development agreement with the U. S. Armys National Automotive Center to evaluate hybrid-hydraulic driveline systems for military and commercial applications, according to Max Bosotti, Permo-Drives chief executive officer.

   Prototype testing on vehicles in the United States and Australia has shown fuel-economy savings of up to 40 percent. Permo-Drive and the U.S. Armys Tank Automotive Research, Development and Engineering Center (TARDEC) in Warren, Mich., will test hybrid-hydraulic technology across a broad range of vehicles.

   In addition to improved fuel economy, Bosotti said that Permo-Drives regenerative braking and propulsion system has demonstrated an ability to significantly increase brake life and reduce hydrocarbon-and-particulate emissions for all classes of commercial vehicles.

   A medium tactical military vehicle equipped with the new hybrid-hydraulic system was shown for the first time by Permo-Drive and the U. S. Army at the Association of the United States Army (AUSA) 2002 Annual Meeting in Washington, D.C. on October 21-23. Actual vehicle tests are slated to begin in 2003.

Permo-Drive expects to have prototype commercial vehicles equipped with hybrid-hydraulic systems available for testing in major North American vehicle fleets as early as next year and plans to introduce the technology commercially in 2004.

   In our modeling and simulation work to date, parallel hybrid-hydraulic systems show the potential to provide significant fuel-economy savings for future generations of trucks," said Dennis J. Wend, executive director of the U.S. Army National Automotive Center. Additionally, these systems can be retrofitted onto existing vehicles."    

Referred to as a Regenerative Drive System (RDS) by Permo-Drive Technologies, the hybrid-hydraulic system captures previously unused energy generated through a vehicles braking system, then releases the energy back into the driveline as power is needed. Key design" features include:
·   An innovative inline driveshaft,
·   Energy storage devices that utilize special composite materials,
·   Ultra-light-weight metals, and
·   Advanced hydraulic and electronic engineering.

   RDS technology has the potential to save public and private fleet operators billions of dollars in fuel and maintenance costs," said Paul Chandler, Permo-Drive vice president of North American Operations. The RDS system for new as well as retrofit applications represents a remarkable integration of vehicle dynamics, advanced hydraulics, mechanical engineering, accumulator research, material science, computer telemetry and electronics."

Wend noted that The U.S. Army operates a fleet of nearly 250,000 vehicles and is working to transform our fleet into a lighter, more mobile and more fuel-efficient fleet."

The National Automotive Center (NAC) is a division of TARDEC and is the Department of Defense and U.S. Army focal point for collaborative research and development with industry, academia and other government agencies. The NACs mission is to accelerate the infusion of commercially viable technology into military land warfare systems."

Permo-Drive Technologies Ltd. is an Australian-based company with North American offices in the Detroit area. More information about the company is available on the Internet at www.permo-drive.com.

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Permo-Drive Company Contact

Paul Chandler
Permo-Drive Technologies Ltd.
Phone: 734.944.7279
E-Mail: paul.chandler@comcast.net
URL: www.permo-drive.com

Permo-Drive Media Contact

Larry Weis
AutoCom Associates
Phone: 248.647.8621
E-Mail: lweis@usautocom.com
URL: www.usautocom.com

National Automotive Center Media Contact

Bruce MacDonald
Strat@comm, Inc.
Phone: 248.649.8000
E-Mail: bmacdonald@stratacomm.net
URL: www. stratacomm.net