We have audited the accompanying balance sheets of China Motor Corporation as of December 31, 2007 and 2006, and the related statements of income, changes in stockholders’ equity and cash flows for the years then ended. These financial statements are the responsibility of the Corporation’s management. Our responsibility is to express an opinion on these financial statements based on our audits. However, we did not audit the financial statements of (a) DaimlerChrysler Vans Hong Kong Ltd., Shung Ye Motors Corporation, Fu Yu Venture Capital Investment Corporation and Uni Auto Parts Manufacture Co., Ltd. as of and for the year ended December 31, 2007 and (b) Shung Ye Motors Corporation, Uni Auto Parts Manufacture Co., Ltd. and Fu Yu Venture Capital Investment as of and for the year ended December 31, 2006, in which the Company had equity-method investments, as shown in the accompanying financial statements. These investments were 2.7% (NT$1,543,508 thousand) and 1.4% (NT$809,151 thousand) of the Corporation’s total assets as of December 31, 2007 and 2006, respectively. The Corporation’s equity in their net loss amounted to NT$79,276 thousand in 2007 and equity in their net gain amounted to NT$3,809 thousand in 2006, or 4.4% and 0.1%, respectively, of the Corporation’s operating income before tax. These investees’ financial statements were audited by other auditors, whose reports have been furnished to us and our opinion, insofar as it relates to the amounts included for these investees, is based solely on the reports of the other auditors.

We conducted our audits in accordance with the Rules Governing the Audit of Financial Statements by Certified Public Accountants and auditing standards generally accepted in the Republic of China. Those rules and standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits and the reports of the other auditors provide a reasonable basis for our opinion.

In our opinion, based on our audits and the reports of the other auditors, the financial statements referred to above present fairly, in all material respects, the financial position of China Motor Corporation as of December 31, 2007 and 2006, and the results of its operations and its cash flows for the years then ended, in conformity with the Guidelines Governing the Preparation of Financial Reports by Securities Issuers, requirements of the Business Accounting Law and Guidelines Governing Business Accounting relevant to financial accounting standards, and accounting principles generally accepted in the Republic of China.

As more fully discussed in Note 3 to the financial statements, effective January 1, 2006, China Motor Corporation adopted the newly released Statements of Financial Accounting Standards (“Statements” or SFAS) No. 34 - “Accounting for Financial Instruments” and No. 36 - “Disclosure and Presentation of Financial Instruments” and related revisions of previously released Statements. The Corporation also adopted on January 1, 2006 SFAS No. 5 - “Long-term Investments under the Equity Method” and No. 25 - “Business Combinations.” It earlier adopted SFAS No. 37 - “Intangible Assets” on October 1, 2006.

We have also audited the consolidated financial statements of China Motor Corporation and subsidiaries as of and for the years ended December 31, 2007 and 2006 and have expressed a modified unqualified opinion on those statements in our report (not presented herewith) dated March 12, 2008.