AFS 2010 REVENUES UP 33% VERSUS 2009

TSXV "AFX"

CALGARY, Jan. 26 /CNW/ - Alternative Fuel Systems (2004) Inc. ("AFS" or the "Company") (TSX Venture: AFX) announced today that its total revenue from product sales, engineering and interest in the year ended December 31, 2010 was about $3.27 million, up more than 33% versus the total revenue of  $2.45 million recorded in the calendar year 2009.

Jim Perry, President and CEO of AFS stated, "We are particularly pleased with the increases we have seen in engine controller sales.  In 2010, our sales in this product line jumped by over 70% compared to controller sales in 2009.  Very close to $2 million of our total revenue in 2010 was generated through controller sales, while in 2009, less than 1.2 million came from that product line.  Our controllers are now being used in production by vehicle manufacturers in India and Thailand.  In addition, sales of fuel injectors more than doubled in 2010, from about $144,000 in 2009 up to approximately $398,000.  Sales of natural gas pressure regulators were only off by about 12%, from about $750,000 in 2009 to about $655,000 in 2010, as our business shifted more towards supplying spare parts for previously manufactured vehicles.  Finally, engineering revenue was down about 55%, from $325,000 in 2009 to $143,000 in 2010.  In the second quarter of 2009, there were several large engineering projects that reached billable milestones.  The billable milestones reached on projects in 2010 were fewer, although in the final quarter of 2010, we recorded almost $60,000 of engineering revenue."

Mr. Perry added "Our complete financial results for the year 2010 should be available in late April, after our auditors have completed their work.  In the meantime, we wanted to let our stakeholders know about the real progress that we are making through our focus on growing the engine controller hardware and software business line".

AFS, based in Calgary, Canada, is a leading developer and manufacturer of natural gas vehicle engine controllers and associated components.

Forward-looking statements

Certain statements in this News Release including but not limited to (i) statements that may contain words such as "trend", "anticipate", "could", "expect", "seek", "may", "might", "intend", "will", "believe", "should", "project", "forecast", "plan" and similar expressions, including the negatives thereof, (ii) statements that are based on current expectations and estimates about the markets in which the Company operates including India and (iii) statements of belief, intentions and expectations about developments, results and events that will or may occur in the future with respect to engine controllers or otherwise, constitute "forward-looking statements" and are based on certain assumptions and analysis made by the Company. Forward-looking statements in this News Release specifically include, but are not limited to, statements with respect to future business opportunities, nature and timing thereof; business strategy; expansion and growth of the Company's business and operations and other such matters as the case may be. Such forward-looking statements are subject to important risks, uncertainties and assumptions which are difficult to predict and that may affect the Company's operations, including, but not limited to: the impact of general economic conditions; industry conditions; customer base changes; financial market conditions; government and regulatory developments; demand for natural gas engine controller technology; oil and natural gas supply, demand and pricing; foreign exchange rates; competition; market conditions in the countries where the Company operates; and the Company's ability to attract and retain qualified personnel. The Company's actual results, performance or achievements could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do transpire or occur, what benefits or disadvantage the Company may derive there from. Except as required by applicable securities laws, the Company undertakes no intention or obligation to update or revise any forward-looking statements.

All forward-looking statements contained in this document are expressly qualified by this cautionary statement. Further information about the factors affecting forward-looking statements is available in the Company's current financial statements and other documents that the Company files from time to time with securities regulatory authorities.  Copies of these documents are available without charge from the Company or electronically on the Internet on the Company's SEDAR profile at www.sedar.com.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.


SOURCE Alternative Fuel Systems (2004) Inc.

For further information:

For further information please contact Jim Perry, President and CEO Phone: (403) 516-6632
E-mail jperry@afsglobal.com.

Visit our website at:www.afsglobal.com

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Alternative Fuel Systems (2004) Inc.

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