China Automotive Systems, Inc. Business Report FY ended Dec. 2014

Financial Overview

(in millions USD)
FY ended Dec. 31, 2015 FY ended Dec. 31, 2014 Rate of Change
Sales 443.53 466.77 - -
Operating Income 29.65 44.43 - -Currency exchange rate fluctuations affect the company's profits.
Ordinary Income 32.05 46.08 - -
Net Income 27.90 39.59 - -


-The Company announced its main subsidiary, Hubei Henglong Automotive System Group Co., Ltd., has sold its 51% equity control position in Fujian Qiaolong Special Purpose Vehicle Co., Ltd. to Longyan Huanyu Emergency Equipment Technology Co., Ltd. Terms of the transaction include a cash payment of RMB 20 million and the repayment of a RMB 34 million loan by Fujian Qiaolong to CAAS. After transaction, CAAS doesn’t hold any share of Fujian Qiaolong Special Purpose Vehicle Co., Ltd. (From an announcement by the company on April 22, 2016)


-In August 2014, the Company announced that the company and Jingzhou Jiulong Machinery and Electronic Manufacturing Co., Ltd. signed an agreement that China Automotive Systems will acquire the following shares from Jingzhou Jiulong Machinery and Electronic Manufacturing: a 20 percent share in Jingzhou Henglong Automotive Parts Co., Ltd.; and a 19 percent share in Shashi Jiulong Power Steering Gears Co., Ltd. These transactions are expected to be completed in the third quarter of 2014, converting the two joint ventures into wholly owned subsidiaries of China Automotive Systems. (From a press release on August 11, 2014)

-In the second quarter of 2014, the Company acquired a 51% ownership interest in Fujian Qiaolong Special Vehicle Co., Ltd. at 3 million US dollars. Based in Longyan, Fujian, Fujian Qiaolong mainly manufactures special vehicles. The acquisition expands the Company's scope of business. (From the Company's 2014 Annual Report)

New Company

-In May 2014, Wuhan Jielong Electric Power Steering Co., Ltd., the Company's subsidiary, established Wuhan Chuguanjie Automotive Science & Technology Ltd., which mainly engages in R&D and manufacture automobile electronic systems and parts. (From the Company's 2014 Annual Report)


-The Company said it has signed a new multi-year agreement to supply its steering systems for the 2015 models of Chrysler’s Ram 4500 and Ram 5500 Chassis Cab. The company began supplying steering systems to Chrysler in 2008, initially for the Jeep Wrangler. It has been providing steering systems also for the Ram 2500 and Ram 3500 heavy-duty trucks since 2012. The company’s recirculating ball steering systems are currently featured on all heavy-duty trucks assembled at Fiat Chrysler’s North American plants. (From news releases issued by multiple sources on October 21, 2014)

R&D Expenditure

FY ended Dec. 31, 2015
(million yuan)
FY ended Dec. 31, 2014
(million yuan)
FY ended Dec. 31, 2013
(million yuan)
R&D Expenditure 22.3 23.0 20.9
Ratio of R&D expenses to sales 5.03% 4.93% 5.03%

R&D Structure

-The Company owns a Hubei Provincial-Level technical center, called the Jingzhou Henglong Automotive Technology (Testing) Center, which has been approved by the Hubei Economic Commission. The center has a staff of about 306 employees that primarily focus on steering system R&D, testing, improvements in production processes, and new applications for various materials and production methodologies.

-The Company has partnered with Tsinghua University to establish a steering system research center, called Tsinghua Henglong Automobile Steering Research Institute, for the purposes of R&D and electric power steering experimentation.

-In Jan. 2015, the Group formed Hubei Henglong Group Shanghai Automotive Electronics Research and Development Ltd., which mainly engaged in design and sale of automotive electronics.

Technological Alliance

-The Company had or currently has the following technological agreements:

  • Bishop Steering: From 2006 to 2012, the Company had a licensing agreement with Bishop Steering Technology Limited, a leader in automotive steering gear technology innovation which offers advanced technology for steering valves. The agreement was not renewed in 2013 as the Company had the capabilities to develop its own steering valves.
  • Nanyang Ind. Co. Ltd.: The Company signed a technology transfer agreement with Nanyang Ind. Co. Ltd., a leading steering column maker, for the technology necessary to develop electronic power steering systems.
  • Korea Delphi Automotive: The Company signed a technology licensing agreement with Korea Delphi Automotive Systems Co., Ltd.


-As of Dec. 31, 2015, the Company has over 85 Chinese patents.

Capital Expenditure

(in millions USD)
Company Name FY ended Dec. 31, 2015 FY ended Dec. 31, 2014 FY ended Dec. 31, 2013
Jingzhou Henglong Automotive Parts 6.42 7.55 8.07
Shashi Jiulong Power Steering Gears 1.09 2.18 0.67
Shenyang Jinbei Henglong Automotive Steering System 0.15 0.15 0.45
Wuhu Henglong Automotive Steering Systems 1.35 0.86 0.76
Hubei Henglong Automotive System Group (Formerly Jingzhou Hengsheng Automotive System) 11.50 6.21 4.24
Other Sectors (1) 9.38 8.76 1.04
Total Segments 29.88 25.71 15.24
Corporate 0.002 0.43 -
Eliminations (0.67) (2.93) (0.37)
Total 29.22 23.21 14.87

(1) The companies in the Other Sectors category include Wuhan Jielong Electric Power Steering Co., Ltd.; Universal Sensor Application, Inc.; Chongqing Henglong Hongyan Automotive Systems Co. Ltd.; Beijing Hainachuan Henglong Automotive Steering System Co., Ltd.; Henglong USA Corporation; and CAAS Brazil's Imports & Trade in Automotive Parts Ltd.

Investment Outside China

-The Companyh announced that it will construct a new steering plant in Sao Paulo, Brazil. The company will initially invest USD 3 million in this project, planning to begin production operations April 2015. The plant is expected to be able to produce 100,000 steering systems per year initially. The annual production capacity is planned to be increased up to 700,000 sets. These steering systems will be supplied mainly to customers in the South American market. (From news releases issued by multiple sources on December 4, 2014)