NEWS RELEASE

CONTACT: Gary S. Maier

Maier & Company, Inc.

(310) 442-9852

HIGHWAY HOLDINGS RECEIVES PREFERRED SUBCONTRACTOR AWARD FROM

BERGER LAHR GMBH&CO., KG, A SCHNEIDER ELECTRIC SUBSIDIARY

HONG KONG —July 23, 2007— Highway Holdings Limited (Nasdaq:HIHO) today announced it has received a preferred subcontractor award from Berger Lahr GmbH&Co., KG, a subsidiary of Schneider Electric SA, for excellence in original equipment manufacturing of motors for motion controllers, drives, compact drives, actuators and linear motion devices -- reaching a milestone production level of one million motors since the signing of a cooperative manufacturing agreement in July 2004.

Highway Holdings won the award for outstanding performance as a subcontractor based on its quality, logistics and product support. Thorsten Nieter, purchasing director of Berger Lahr, presented the award at an event in China marking the manufacturing of the one-millionth motor.

“This recognition by Berger Lahr underscores our commitment to the highest manufacturing standards to produce customized and sophisticated components, subassemblies and complete assemblies with multi-production capabilities for large-scale global customers. Equally important, this milestone event highlights our success and the importance we place on maintaining and enhancing long-term OEM client relationships,” said Roland Kohl, president and chief executive officer of Highway Holdings.

“Highway Holdings and Berger Lahr have created a state-of-the art motor manufacturing plant in China, operating under our organization’s supervision. The quality and production levels today validate the correctness of our initial decision three years ago to partner with Highway Holdings and transfer technology and specific expertise; and, we are optimistic that based on the current growth rate we will be able to reach the next milestone production level of 10 million motors in the near future,” said Norbert Gauß, chief executive officer of Berger Lahr.

About Berger Lahr

Berger Lahr offers products, systems and complete solutions for positioning and automation, supported by comprehensive consulting and engineering services - from the development stage through production and commissioning.

About Highway Holdings

Highway Holdings produces a wide variety of high-quality products for blue chip original equipment manufacturers -- from simple parts and components to sub-assemblies. It also manufactures finished products, such as light fixtures, LED lights, radio chimes and other electronic products. Highway Holdings is headquartered in Hong Kong and operates four manufacturing facilities in the People's Republic of China.

Except for the historical information contained herein, the matters discussed in this press release are forward-looking statements which involve risks and uncertainties, including but not limited to economic, competitive, governmental, political and technological factors affecting the company's revenues, operations, markets, products and prices, and other factors discussed in the company’s various filings with the Securities and Exchange Commission, including without limitation, the company’s annual reports on Form 20-F.

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