China Automotive Systems Wins Multi-Year Contract With SAIC-GM-Wuling
WUHAN, China--May 2, 2013" China Automotive Systems, Inc. ("CAAS" or the "Company") , a leading power steering components and systems supplier in China, today announced that its subsidiary, Jingzhou Henglong Automotive Parts Co., Ltd., has entered into a multi-year agreement to supply the SAIC-GM-Wuling ("SGMW") joint venture with its high-quality rack and pinion power steering systems.
China Automotive Systems has commenced shipments, and the steering units are intended to be primarily installed in SGMW's Wuling Hongguang brand, which is the best selling multi-purpose vehicle ("MPV") in China. Based on current order rates, total steering systems to be shipped by the Company to SGMW could approximate 350,000 units for the 2013 year. No other terms of the agreement were disclosed.
GM reported record sales at SGMW of over 1.4 million total vehicles in 2012, representing a 12.4% year-over-year sales volume increase. The SGMW joint venture was founded in 2002 and it consists of two Chinese domestic partners, SAIC Motor Corporation Limited and Liuzhou Wuling Motors Co Limited, and one foreign partner, General Motors ("GM China"). SGMW is one of the leading designers and manufacturers of minivans, pick-up trucks and MPVs as well as one of the important participants in passenger cars in China.
"As the dominant leader in steering products for the Chinese OEM local brands, this major contract win marks another key milestone in the execution of our strategy to diversify our customer base and penetrate into the Sino-foreign joint venture vehicle manufacturing segment. SGMC joins FAW Volkswagen and Dongfeng Peugot Citroen as our customers in this sector, which provides additional verification of our superior research and development program, stringent quality control and world-class production capability," commented Mr. Hanlin Chen, Chairman of China Automotive Systems.
"According to the China Association of Automobile Manufacturers, sales of MPV vehicles climbed by 50% to over 300,000 units in the first quarter of 2013. We are capturing more market share in one of the fastest growing vehicle segments in China and we are pleased to be supporting SGMW's robust growth," Mr. Chen concluded.