China Automotive Systems Forms Joint Venture with Chery Automobile
WUHAN, Hubei, China, May 4, 2006; China Automotive Systems, Inc., a leading power steering components and systems supplier in China, today announced that its wholly-owned subsidiary, Great Genesis, has entered a joint venture agreement with Chery Technology Ltd., a wholly owned subsidiary of Chery Automobile Co. Ltd. ''Chery Auto'', the fastest-growing independent automobile manufacturer in China, to focus on R&D and manufacturing of power steering systems and components.
The joint venture company, under the name of Wuhu Henglong Auto Steering Systems ''WHAS'', will be based in Wuhu, Anhui near Chery Auto's headquarters. Under the terms of the agreement, the total investment in the joint venture is 50 million RMB (approximately USD 6 million). China Automotive Systems and Chery Auto will have 77.3% and 22.7% shares respectively in the joint venture. Upon the completion of facility construction in 2007, WHAS is expected to reach a total production capacity of 300,000 sets of power steering systems and components annually. Most products of the joint venture will be supplied to Chery Auto. With the new facility in Wuhu, China Automotive Systems will also commence developing sales to China's eastern market.
Chairman and Chief executive officer of China Automotive Systems, Hanlin Chen said, "We continue to execute our plan to grow our market share in China's passenger vehicle market. With the new facility, we expect to close the gap between the growing market demand for our steering products and our current production capacity. After being awarded ''Superior Supplier'' status by Chery Automobile in 2005, we are taking a major step towards strengthening our partnership with Chery Automobile. The joint venture will leverage China Automotive Systems' strong R&D and efficient cost management to fuel Chery Automobile's rapid expansion in the fast growing Chinese passenger vehicle market."
About China Automotive Systems
Based in Hubei Province, People's Republic of China, China Automotive Systems, Inc. is a leading supplier of power steering components and systems to the Chinese automotive industry, operating through four Sino-foreign joint ventures. The Company offers a full range of steering system parts for passenger automobiles and commercial vehicles. The Company currently offers 4 separate series of power steering and 307 models of power steering with an annual production capacity of 700,000 sets, steering columns, steering oil pumps and steering hoses. Its customer base is comprised of leading Chinese auto manufacturers such as China FAW Group Corp., Donfeng Auto Group Co., Ltd., Brilliance China Automotive Holdings Ltd., Beiqi Foton Motor Co., Ltd. and Chery Automobile Co., Ltd. etc. For more information, please visit: http://www.caasauto.com/ .
About Chery Automobile
Chery Automobile Co., Ltd., founded in 1997 in Wuhu City, People's Republic of China, has become the fastest-growing independent automaker in China. Chery is committed to developing world-class automobiles via cooperation with top engineering firms such as Lotus Engineering of the U.K, and Mitsubishi Automotive Engineering of Japan, and leading auto designing firms such as Bertone and Pininfarina of Italy. In its relentless pursuit of quality, Chery adopted DURR Paint Systems in its paint shop in 2004. In J.D.Power 2004 China Initial Quality Study, Chery QQ finished first in the compact car segment. In 2005, as a groundbreaking event for the Chinese automotive industry, Chery started producing China's first high-performance Euro IV engines in cooperation with AVL List of Austria. Chery has so far launched its products in 29 countries. For the time being, Chery is developing a new line-up of products aiming at auto markets in the U.S and EU. In 2005, a strategic partnership was formed between Chery and Visionary Vehicles of the USA for launching Chery products in North America in 2007. For more information, please visit www.cheryglobal.com .