HUBEI PROVINCE, China – The board of China Automotive Systems (CAAS), a leading power steering components and systems supplier in China, has approved the formation of a joint venture with SAIC-IVECO Hongyan Co. to create a new manufacturing facility with a capacity to produce 200,000 power steering units for commercial vehicles in China.
The new joint venture, named Chongqing Henglong Hongyan Power Steering Systems Co. Ltd., has registered capital of RMB60 million and it will be 70 percent owned by CAAS. SAIC-IVECO will own the remaining 30 percent of the joint venture, which will be located in Chongqing City.
Based in Chongqing City, China, the SAIC-IVECO Hongyan Co. has been manufacturing heavy-duty trucks for more than 40 years. It designs and manufactures a wide range of heavy-duty trucks and specialty trucks based on heavy-duty trucks such as tractor trucks, dump trucks, cargo trucks, tanker trucks and some construction engineering vehicles like concrete mixer trucks, dump trucks and heavy-duty cargo trucks. Truck manufacturing capacity is 70,000 vehicles annually and consists of more than 1,000 models, with load capacities ranging between 5 tons to 60 tons.
Hanlin Chen, chairman of CAAS, stated, "We are pleased to join forces with SAIC-IVECO, a highly regarded manufacturer of heavy-duty trucks in China. Chongqing Henglong will design and produce power steering units to meet the specific steering characteristics of SAIC-IVECO’s vehicles. The joint venture can also market and sell these steering units to other commercial vehicle manufacturers, especially those located in nearby southwest China, once SAIC-IVECO’s purchase requirements have been fulfilled.
"When our joint ventures become operational, CAAS’s production capacity will be significantly expanded as Chongqing Henglong combines with our Beijing Auto joint venture’s new production capacity of 500,000 steering units. Both our joint venture partners have committed to purchasing the majority of the steering units produced at the respective facilities. These joint ventures will have a positive effect on CAAS’s ability to grow and enhance shareholder value."
