CAAS’s subsidiary Hubei Henglong Automotive Systems Group Co., Ltd. and KYB‑UMW Sdn Bhd signed a strategic cooperation memorandum of understanding on November 3, 2025, to jointly develop and manufacture electric power steering (EPS) systems and mechanical steering gears in Malaysia.
The parties will build a new manufacturing facility, designated SP25, at a site in Malaysia. Construction is slated for completion in December 2025, with the plant expected to begin operations in 2026. Initial production will supply Perodua, Malaysia’s largest carmaker, which accounts for a significant share of the domestic market.
The MoU builds on a prior joint venture, Henglong KYB, established in August 2018, which focused on EPS production. The new partnership expands CAAS’s presence in the ASEAN region and leverages KYB‑UMW’s local manufacturing expertise and market influence, including its 38% stake in Perodua through UMW.
CAAS reported a 12% increase in EPS demand in China during the first half of 2025, driven by the rapid adoption of electric vehicles and advanced driver‑assist systems. The company’s annual production capacity exceeds 8 million steering components, and 80% of its R&D spend in 2025 was directed toward EV technologies.
Analysts note that the ASEAN‑6 automotive market is projected to recover modestly in 2025, with Malaysia showing resilience and a 2% rise in vehicle sales in 2024. The partnership positions CAAS to capture a growing share of the regional EPS market, which is expected to reach $48.8 billion by 2035.
The joint venture will also enable localized production, reducing logistics costs and allowing CAAS to supply both original equipment manufacturer and aftermarket customers across Southeast Asia. The collaboration aligns with Malaysia’s goal of increasing electric vehicle penetration to 20% of new car sales by 2030.
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