China Automotive Systems Issues Correction to FAW Volkswagen Agreement News Release

WUHAN, Hubei, China, May 21, 2007-- China Automotive Systems, Inc. , a leading power steering components and systems supplier in China, today announced the correction to its press release "China Automotive Systems Signed Supply Agreement with Volkswagen Joint Venture in China", issued on May 17th, 2007 by China Automotive Systems, Inc. The agreement term in the news, which incorrectly included "Audi" and "systems", should read: "The power steering gears will be installed in Volkswagen's Jetta vehicles in China." and "Jingzhou Henglong Automotive Parts Co., has entered into an agreement with FAW Volkswagen to supply its high quality power steering gears."

About CAAS

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 seven 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 800,000 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/ .