caas.jpgWhen was the last time that a western automotive supplier boasted double digit growth rates? Here's one Chinese supplier going from strength to strength thanks to China's booming car manufacturing sector.

China Automotive Systems, which specialises in power steering parts and systems, has reported a tripling of its Q2 profits on sales up nearly 50% to $36m.

CAS reports in US dollars because it is quoted on the Nasdaq market even though it is based in China and headquartered in Wuhan. Its customer base includes leading Chinese car manufacturers such as China FAW Group, Donfeng Auto Group, Brilliance China Automotive Holdings and Chery Automobile.

It has begun to won business from the foreign JV carmakers in China, including SAIC GM Wulin, one of the JVs of General Motors, and most recently, FAW Volkswagen, the Chinese JV of German carmaker.

Through its subsidiary, Jingzhou Henglong Automotive Parts, CAS will supply power steering products for Volkswagen Jettas manufactured in China. With this supply agreement, China Automotive Systems can boast that it has has entered into Volkswagen's global sourcing system and become a Tier 1 supplier to one of the largest carmakers in China.

Foreign carmakers are increasing their purchase of car parts and components in China, and CAS hopes to dispel any lingering suspicions about the quality of Chinese parts by focussing on brand recognition, quality control and R&D. It also plans to make strategic acquisitions to carry out both domestic and international market expansion.

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