China Automotive Systems begins mass production of L2+ steering system

WUHAN, China - China Automotive Systems, Inc. (NASDAQ:CAAS), currently trading at attractive valuations according to InvestingPro analysis, announced Wednesday that its L2+ standard electro-hydraulic steering system has entered mass production in China. The company, with a market capitalization of $123.1 million, has shown strong revenue growth of 18.3% over the last twelve months.

The second-generation intelligent electro-hydraulic circulating ball power steering (iRCB) system, developed by the company’s subsidiary Shashi Jiulong, completed the entire process from design to mass production in eight months after the project launched in September 2024.

According to the company’s press release statement, the system is China’s first iRCB compatible with L2+ assisted driving. The technology utilizes electro-hydraulic control to improve steering accuracy and response speed while optimizing energy consumption.

CAAS claims the system could reduce operational costs by nearly RMB 36,000 (approximately $5,000) per vehicle annually.

Qizhou Wu, Chief Executive Officer of CAAS, said the company’s iRCB products are "on track to break new sales records for intelligent driving systems in China in 2025."

China Automotive Systems supplies power steering components and systems to the Chinese automotive industry through sixteen Sino-foreign joint ventures and wholly owned subsidiaries. The company offers steering system parts for both passenger and commercial vehicles with an annual production capacity exceeding 8 million sets of steering gears, columns and hoses.

The company’s customer base includes China FAW Group, Dongfeng Auto Group, BYD Auto, Beiqi Foton Motor, and Chery Automobile in China, as well as Stellantis and Ford Motor Company in North America.

In other recent news, China Automotive Systems reported a 19.9% increase in first-quarter revenue, reaching $167.1 million, compared to $139.4 million in the same period last year. The company, however, saw a decline in adjusted earnings per share to $0.24 from $0.27. Sales of electric power steering products surged by 54% year-over-year, contributing significantly to the total revenue. The company reaffirmed its full-year 2025 revenue guidance of $700 million. Additionally, China Automotive Systems announced a merger agreement with its subsidiary, China Automotive Systems Holdings, Inc., to redomicile to the Cayman Islands. The merger is subject to customary closing conditions and is expected to complete by the third quarter of 2025. In corporate developments, shareholders approved key proposals at the annual meeting, including the election of five directors and the extension of the 2004 Stock Option Plan. Furthermore, the company secured a significant order from a European car manufacturer for its electric steering systems, valued at over $100 million annually, with production expected to start by 2027.

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