Power steering specialist China Automotive Systems has formed a new wholly owned subsidiary, Jingzhou Hengsheng Automotive Systems to focus on opportunities with Sino-foreign joint venture OEMs in China and OEMs in international markets.

Hengsheng is based in Jingzhou City, Hubei Province, where the main business of China Automotive Systems is also located. The company expects to invest about $US30m in Hengsheng over the next three years.

The first phase of the new facilities, with a capacity of 700,000 power steering units, is expected to be fully constructed by the end of 2008. Hengsheng will gradually install new equipment, complete testing and ramp up production capacity in the next three years to reach a designed capacity of 1.3m units by 2010. This expansion will more than double current capacity of approximately 1.1m units.

Hengsheng said it would work meet the stringent standards required by global OEMs.