RELATED PARTY TRANSACTIONS

3 Months Ended

Mar. 31, 2015

RELATED PARTY TRANSACTIONS [Abstract]

RELATED PARTY TRANSACTIONS

NOTE 8 – RELATED PARTY TRANSACTIONS

            Due from (to) related parties

      Amount due from related parties are principally for advances in the normal course of business for parts and suppliers used in manufacturing.

     Amount due from related parties are as follows (in thousands):

Amount due from related parties are as follows:

	March 31, 2015		December 31, 2014
Sanmen Branch of Zhejiang UFO Automobile Manufacturing Co., Ltd	$	1,429	$	1,427
JAZ		1,291		1,311
Jonway Motor Cycle		148		53
Total	$	2,868	$	2,791

Amount due to related parties are follows (in thousands):

Amount due to related parties are follows:

	March 31, 2015		December 31, 2014
Jonway Group	$	4,913	$	2,648
Jonway Motor Cycle		-		64
Taizhou Huadu		613		652
Shanghai Zapple		37		37
Mr. Wang		276		146
Betterworld		149		149
Taizhou Jonway Electric Vehicle Selling Co		2,063		2,306
Zhejiang Jonway Painting Co. Ltd.		628		472
Cathaya Operations Management Ltd.		500		297
Cathaya Management Ltd.		350		350
Total	$	9,529	$	7,121

      Transactions with `Jonway Group

       Jonway Group is considered as a related party as the Wang Family, one of the principal shareholders of the Company, has controlling interests in Jonway Group. Jonway Group supplies some of plastics spare parts to Jonway and gave guarantees on Jonway short term bank facilities from China-based banks. Jonway made such purchase from Jonway Group for a total of $755,000 and $217,000 for the three months ended March 31, 2015 and 2014, respectively.

      Jonway Agreement with Zhejiang UFO

        Based on a contract by and among the Zhejiang UFO, Jonway Group and Jonway dated as of January 1, 2006, Zhejiang UFO has authorized Jonway to operate its Sanmen Branch to assemble and sell UFO branded SUVs for a period of 10 years starting from January 1, 2006.

       According to the contract, Jonway shall pay Zhejiang UFO a variable contractual fee which is calculated based on the number of SUVs that Jonway assembles in the Sanmen Branch every year, at the following rates (historical exchange rate):

The first 3,000 vehicles	$44 per vehicle
Vehicles from 3,001 to 5,000	$30 per vehicle
Vehicles over 5,000	$22 per vehicle

        Zhejiang UFO is considered a related party because the Wang Family, who are shareholders of Jonway, has certain non-controlling equity interests in Zhejiang UFO.