China Automotive Systems Signs Strategic Cooperation MoU With KYB-UMW to Advance High-End Manufacturing in Malaysia and Further Develop ASEAN Market

Rhea-AI Summary

China Automotive Systems (NASDAQ: CAAS) subsidiary Hubei Henglong signed a strategic cooperation MoU with KYB-UMW in Malaysia on Nov 3, 2025 to localize production and transfer steering technology.

Under the MoU, KYB-UMW's SP25 plant (completion expected Dec 2025, operational in 2026) will produce EPS and mechanical steering gears for Perodua and other OEM and aftermarket customers across ASEAN, forming a Malaysia-centered regional manufacturing and supply system.

Positive

• SP25 plant completion expected Dec 2025, operational 2026
• Initial supply committed to Perodua, Malaysia's largest carmaker
• Local production of EPS and MSG using Hubei Henglong technology
• Regional manufacturing hub aims to serve OEM and REM across ASEAN

Negative

• None.

Insights

Corporate strategy analyst

CAAS subsidiary signs MoU with KYB-UMW to localize steering component manufacturing for Perodua and ASEAN expansion.

The agreement commits Hubei Henglong to transfer technology and jointly produce electric power steering and mechanical steering gears with KYB-UMW in Malaysia. Initial supply is targeted at Perodua, with plans to address OEM and aftermarket channels across ASEAN, and the KYB-UMW plant (SP25) is due to complete in December 2025 and start operations in 2026.

The business mechanism links CAAS's advanced steering technology with a local partner that holds manufacturing capacity and market access. This reduces export dependency and creates a regional supply hub, though outcomes depend on successful localization, quality transfer, and plant ramp timing.

Key risks include successful technology transfer, timely SP25 commissioning, and conversion of the MoU into binding contracts and volumes for Perodua and other OEMs. Monitor construction progress toward December 2025, formal production agreements, and initial supply contracts during 2026.

WUHAN, China, Nov. 3, 2025 /PRNewswire/ -- China Automotive Systems, Inc. (NASDAQ: CAAS) ("CAAS" or the "Company"), a leading power steering components and systems supplier in China, today announced that its  subsidiary, Hubei Henglong Automotive Systems Group Co., Ltd. ("Hubei Henglong"), has signed a strategic cooperation memorandum of understanding ("MoU" ) with KYB-UMW Sdn Bhd in Malaysia.

KYB-UMW is a well-known local supplier of automotive chassis systems. It is a joint venture between KYB, a globally renowned automotive shock absorber and component company, and UMW, a core Malaysian automotive enterprise. UMW is a Malaysian conglomerate with core businesses covering automobiles, engineering, energy and other fields. It holds a 38% stake in Perodua, Malaysia's largest car manufacturer, and it has also established a joint venture with Toyota in Malaysia, UMW Toyota Motor, providing significant influence in the local automotive industry chain.

This collaboration transcends a simple product export model, achieving a deep partnership encompassing technology transfer, collaborative production, and joint future planning. Initially, products will be supplied to Perodua, Malaysia's national automotive brand. Moving forward, both parties will jointly explore further opportunities in the OEM and aftermarket sectors, extending the benefits of their collaboration to the broader ASEAN region. Through the cooperation MoU, a regional manufacturing and supply system will be centered in Malaysia, providing high-quality steering system solutions for original equipment manufacturers (OEMs) and the replacement parts market (REM).

According to the MoU, the two parties will jointly produce key automotive components such as electric power steering (EPS) systems and mechanical steering gears (MSG) locally. This cooperation represents an overseas extension of Hubei Henglong's advanced technological capabilities and is also an important step to achieve localized manufacturing and regionalized services. The advanced technology brought by Hubei Henglong is expected to enhance KYB-UMW's competitiveness as an automotive systems supplier.

To support this strategic partnership, KYB-UMW's new advanced manufacturing plant (SP25) under construction is expected to be completed in December 2025 and operational in 2026. This plant will be dedicated to producing steering system products, including those using Hubei Henglong technology. Through cooperation with KYB-UMW, Hubei Henglong will introduce advanced Chinese steering technology to Malaysia, and work with local partners to build a future-oriented smart manufacturing ecosystem. This MoU marks a shift in Sino-Malaysian manufacturing cooperation from "supply chain reciprocity" to "value chain co-creation".

In August 2018, Hubei Henglong and KYB formed Henglong KYB, which engages in design, manufacture, sales and after-sales service of automobile electronic systems, particularly for various advanced electric power steering ("EPS") systems. This new cooperation further strengthens this ongoing relationship and expands its presence in the ASEAN markets.

Mr. Qizhou Wu, the Chief Executive Officer of CAAS, commented, "This strategic cooperative MoU marks a key step forward for Hubei Henglong in its internationalization strategy and regional cooperation.  With our partners, we plan to bring advanced steering system technology into the Malaysian and ASEAN markets as a key component of Hubei Henglong's regional growth strategy. We firmly believe that by combining Hubei Henglong's deep R&D expertise and product quality in advanced steering technology with KYB-UMW's strong local manufacturing capabilities and market influence in Malaysia, we can efficiently and quickly provide local customers with high-quality, highly competitive steering system products and services."

"Moving forward, both parties will jointly explore further opportunities in the OEM and aftermarket sectors, extending the benefits of their collaboration to the broader ASEAN region. We believe the ASEAN market is offering great growth opportunities for localized automotive parts manufacturing. We look forward to working closely to achieve localized production of high-value components at the Serendah campus. This is  a win-win situation for both companies, and a significant step in driving the transformation of Malaysia's automotive industry," Mr. Wu concluded.

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 its sixteen Sino-foreign joint ventures and wholly owned subsidiaries. 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 8 million sets of steering gears, columns and steering hoses. Its customer base is comprised of leading auto manufacturers, such as China FAW Group, Corp., Dongfeng Auto Group Co., Ltd., BYD Auto Company Limited, Beiqi Foton Motor Co., Ltd. and Chery Automobile Co., Ltd. in China, and Stellantis N.V. and Ford Motor Company in 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. As a result, the Company's actual results could differ materially from those contained in these forward-looking statements due to a number of factors, 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 March 28, 2025, and in documents subsequently filed by the Company from time to time with the Securities and Exchange Commission. Any of these factors and other factors beyond our control, could have an adverse effect on the overall business environment, cause uncertainties in the regions where we conduct business, cause our business to suffer in ways that we cannot predict, and materially and adversely impact our business, financial condition and results of operations. A prolonged disruption or any further unforeseen delay in our operations of the manufacturing, delivery and assembly process within any of our production facilities could continue to result in delays in the shipment of products to our customers, increased costs and reduced revenue. We expressly disclaim 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.

For further information, please contact:

Jie Li
Chief Financial Officer
China Automotive Systems, Inc.
jieli@chl.com.cn 

Kevin Theiss
Awaken Advisors
+1-212-510-8922
Kevin@awakenlab.com 

View original content:https://www.prnewswire.com/news-releases/china-automotive-systems-signs-strategic-cooperation-mou-with-kyb-umw-to-advance--high-end-manufacturing-in-malaysia-and-further-develop-asean-market-302602064.html

SOURCE China Automotive Systems, Inc.

FAQ

What did CAAS announce on Nov 3, 2025 about Malaysia and ASEAN?

CAAS said Hubei Henglong signed a strategic MoU with KYB-UMW to localize steering system production in Malaysia and expand into ASEAN.

When will KYB-UMW's SP25 plant begin operations for CAAS products?

The SP25 plant is expected to be completed in December 2025 and operational in 2026.

Which CAAS products will be produced locally under the MoU?

The MoU specifies local production of electric power steering (EPS) systems and mechanical steering gears (MSG).

Will CAAS supply components to Perodua through the KYB-UMW partnership?

Yes; initial products will be supplied to Perodua and the parties plan to expand to other OEM and aftermarket customers.

How does the MoU affect Hubei Henglong's technology role in Malaysia?

Hubei Henglong will transfer advanced steering technology to KYB-UMW to support localized manufacturing and competitiveness.

What strategic benefit does CAAS expect from the KYB-UMW collaboration for CAAS (NASDAQ: CAAS)?

CAAS expects the partnership to enable regionalized services, faster local delivery, and expanded access to the ASEAN OEM and replacement parts markets.