1. CAAS secures contract for C-EPS project from South American automotive manufacturer. 2. Project aims for annual sales of 300,000 units, mass production in 2028. 3. Henglong has 30% market share in Brazilian steering system market. 4. Project enhances CAAS's international expansion strategy towards 2030. 5. CEO highlights growth potential and technological transformation from this collaboration.
The new contract signals strong demand in untapped markets and enhances revenue potential, similar to earlier successful contracts that preceded positive stock performance.
The contract signifies a strategic pivot into new markets, aligning with global trends in electric vehicle technology, indicating future growth.
Mass production expected by 2028 signals long-term revenue generation, consistent with CAAS's expansion strategy.
China Automotive Systems, Inc. (NASDAQ: CAAS), a prominent supplier of power steering components in China, has announced a significant milestone in its international expansion. The company’s wholly-owned subsidiary, Hubei Henglong Automotive System Group, has been awarded a contract for its Column-Assist Electric Power Steering (C-EPS) project by a major South American automotive manufacturer. This contract represents the first large-scale introduction of CAAS's electric power steering systems into the South American automotive supply chain, supporting the company's goals for international growth by 2030.
The newly licensed vehicle platform will encompass several gasoline and hybrid passenger vehicle models, with an anticipated annual sales volume exceeding 300,000 units. Mass production is projected to commence in early 2028.
Henglong's notable success in developing similar C-EPS products for European markets has led to high demand and appreciation from OEM clients. This new collaboration highlights the growing confidence of international automotive manufacturers in Henglong’s research and development capabilities, as well as its robust manufacturing operations.
Since establishing its first overseas factory in São Paulo, Brazil, back in 2012, CAAS has entrenched itself in the South American market. Henglong has reached a market share of over 30% in the Brazilian steering system sector, largely due to its advanced technologies and efficient manufacturing processes.
The C-EPS project is expected to facilitate a comprehensive upgrade of Brazil Henglong’s operations, transitioning from traditional mechanical steering systems to more sophisticated electric power steering technologies. This transition is part of CAAS’s broader strategic plan to build a complete operational framework that supports electric power steering manufacturing in Brazil.
Mr. Qizhou Wu, CEO of CAAS, stated, "The progress of this project will turbocharge our strategic expansion into the South American markets and provide crucial technological transformation in one of the key global automotive markets. Our growing presence in South America also complements our strong footprint in Asia, Europe, and North America as we continue to add to our global reach."
Based in Hubei Province, China, CAAS is a leading provider of power steering components for the automotive industry. The company operates through sixteen Sino-foreign joint ventures and subsidiaries, offering a wide range of steering system parts for both passenger and commercial vehicles. With an annual production capacity exceeding 8 million sets of steering gears, columns, and hoses, CAAS serves major automotive manufacturers including the China FAW Group, Dongfeng Auto Group, and Ford Motor Company.
This article may contain forward-looking statements as defined under the Private Securities Litigation Reform Act of 1995. These statements express CAAS's expectations and beliefs based on current assumptions. Actual results may vary due to risks and uncertainties inherent in the industry. Detailed information regarding factors that could impact the company's performance can be found in the company's Annual Report on Form 10-K filed with the SEC.
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