China Automotive Systems to Form Joint Venture in Brazil
HUBEI PROVINCE, China, Oct. 24, 2011 /PRNewswire-Asia-FirstCall/ — China Automotive Systems, Inc. (Nasdaq: CAAS) (“CAAS” or the “Company”), a leading power steering components and systems supplier in China, today announced that its Board of Directors has approved the formation of a joint venture in Brazil to target the largest automotive market in South America.
The new joint venture, which will be 80% owned by CAAS’s wholly own subsidiary, Hengsheng, will be based in Sao Paulo and established with two local Brazilian automotive partners, with ownership of 15% and 5%, respectively.
Mr. Hanlin Chen, Chairman of CAAS stated, “Brazil is the most important economic engine in South America, and China has surpassed the United States as Brazil’s leading trade partner. The automotive market is on the rise in Brazil, with current annual OEM demand estimated at 3.5 million vehicles and a rapidly growing aftermarket sector. We have seen Chinese automakers, such as Chery Auto, one of our largest customers, successfully penetrate the Brazilian market with high quality, value-added vehicles and believe we can also leverage this trend. Our local partners have proven track records in production and distribution and we believe our strong product development capabilities and high quality control processes for mass production will create tremendous value for local OEM and aftermarket customers. This joint venture will enable us to capitalize on the significant growth opportunities presented by Brazil and South America, as a whole.”
About China Automotive Systems, Inc.
Based in Hubei Province, the 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 nine Sino-foreign joint ventures. The Company offers a full range of steering system parts for passenger automobiles and commercial vehicles. The Company currently offers four separate series of power steering with an annual production capacity of over 3.5 million 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., Dongfeng Auto Group Co., Ltd., BYD Auto Company Limited, Beiqi Foton Motor Co., Ltd., Chery Automobile Co., Ltd. and Chrysler North America outside of North America. For more information, please visit: http://www.caasauto.com.
Forward Looking Statements
This press release contains statements that are “forward-looking statements” as defined under the Private Securities Litigation Reform Act of 1995. Forward-looking statements represent our estimates and assumptions only as of the date of this press release. Our actual results may differ materially from the results described in or anticipated by our forward-looking statements due to certain risks and uncertainties, including those described under the heading “Risk Factors” in the Company’s Annual Report on Form 10-K as filed with the Securities and Exchange Commission on June 28, 2011, and in documents subsequently filed by the Company from time to time. The Company expressly disclaims any duty to provide updates to any forward-looking statements made in this press release, whether as a result of new information, future events or otherwise.
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Chief Financial Officer
China Automotive Systems
SOURCE China Automotive Systems, Inc.