China Automotive Systems, a power steering components and systems supplier in China, has announced record financial results for the fourth quarter and fiscal year ended December 31, 2009.
It said that net sales rose rose by 56.6% year-on-year to a record US$255.6m in fiscal 2009, with net income up 88.3% USD$23.4m.
Mr Qizhou Wu, CEO, said: “We are pleased with our robust growth and continued track record of exceeding industry growth rate, which was 46% in 2009. We began shipping to Chrysler North America in mid-2009 representing our first penetration into the large global markets.
As a tier one OEM supplier of key safety related components in a market requiring one of world’s strictest automotive standards, this new relationship opens new opportunities and stamps a strong endorsement on our product quality and reliability. Additionally, we introduced the first domestically designed electric power steering system and have begun commercial production for customers. Our strong R&D capabilities and on-going development program continue to set entry barriers for our competitors. Overall, with China’s huge market potential, and rapid quality and affordability improvements in the automotive market, we will continue to focus on expanding our market share and strengthening relationships with OEMs to grow our long-term, recurring revenue pipeline and maximize long-term shareholders’ value.”
Net sales for the fourth quarter of 2009 represented a 118.9% year-over-year increase to USD$83.8m, the highest quarterly sales in the company’s history.
Gross profit in the fourth quarter of 2009 rose by 127.3% to USD24.3m. The gross margin in the fourth quarter of 2009 was 29.1% compared with 28.0% in the fourth quarter last year primarily due to a more favourable product mix, economies-of-scale and cost controls.
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Annual net sales were USD$255.6m for the fiscal year 2009, up 56.6% on the previous year.
Sales growth was generated by China’s continued economic expansion leading to higher income levels and greater passenger vehicle sales. The government’s stimulus plans and investment in the national infrastructure helped to generate a greater number of commercial vehicle sales in China, the firm said.
During 2009, costs were reduced as the company’s R&D personnel enhanced product design and production techniques to reduce material wastes, reduce machining time and improve manufacturing efficiency, it said. The company also was also ‘able to lower the price of certain sub-components it purchased’.
The net income for the 2009 year increased by 88.3%, to USD23.4m.
In early 2010, China Automotive Systems announced that its first global OEM customer, headquartered in North America, is the Chrysler Group LLC.
Since mid-2009, steering gears have been exported from China to the United States and installed in the Jeep Wrangler model.
Also in early 2010, CAAS announced that it has begun production of its electronic power steering (“EPS”) system. This new electronic power steering product and technology represents the first such steering system developed internally within China, it says. The company is currently supplying this EPS system at a rate of 2,000 units per month to Suzuki in China.