China Automotive announced it has entered into a joint venture agreement with Hyoseong Electric to design, manufacture and sell electric motors for automotive electric power steering systems, or EPS. The joint venture, Hyoseong Motion Mechatronics System, or HMMS, is 51% owned by CAAS and 49% by Hyoseong Electric. A new production facility is being planned near CAAS's headquarters in Wuhan with an expected annual capacity of 4.5M units upon completion. Total investment in HMMS will be RMB550M with RMB198M for the first phase of the production facility. Hyoseong Electric has become the world's third largest producer of HVAC blower electric motors and the third largest electric motor supplier to automotive EPS products in Asia.
China Automotive (CAAS) announced it has begun a development program for a new recirculating-ball steering, or RCB, steering system in tandem with Chrysler's (FCAU) autonomous vehicle product development. Started in the fall, the i-RCB program is currently in the design verification, or DV, test phase. The company expects to begin mass production in August 2019 with annual sales of approximately 45,000 units. In addition to orders from Chrysler North America, the technology of i-RCB has significant other market opportunities in the Chinese domestic heavy-duty truck market. Intelligent hybrid power steering combines traditional RCB with electric power steering to monitor or control basic functions such as steering speed, active returning, independent steering and emergency steering. In addition, intelligent hybrid power steering provides extended functions such as lane monitoring with departure warning and crosswind compensation.
China Automotive announced that its board of directors approved a share repurchase program of up to $5M of its outstanding common shares periodically over the next 12 months. Repurchases will be made in open market transactions, at prevailing market prices not to exceed $4.00 per share, subject to applicable laws, regulations and approvals. The timing of the share repurchases will depend on a variety of factors, including market conditions. Members of the management team may make additional share purchases in addition to the company repurchase.
China Automotive announced that the special committee of the board has received a letter dated August 16 from the buyer withdrawing its non-binding "going-private" proposal. In a letter dated August 30, 2017 from Hanlin Chen, chairman of the company, and his affiliates, including Wiselink Holdings and Chariot, the buyer proposed to the board an offer to acquire all outstanding shares of common stock of the company not owned by the buyer in a going-private transaction. In the withdrawal letter, the buyer stated that, considering recent market conditions, it has decided to withdraw the proposal and is terminating any further discussion with the company regarding the proposal, with immediate effect.
China Automotive announced it has established a new joint venture, Hubei Henglong KYB Automobile Electric Steering, with KYB Investment , a wholly owned company of Japan KYB, for the development and production of electric power steering systems, or EPS, and other auto-related products. Based in Jingzhou City, Hubei Province, China, Hubei KYB will engage in the research, development, manufacture, sales and service of automotive electric steering systems and other automotive products. Specific product categories include column-type electric power steering system, gear-type electric power steering system, rack-type electric power steering system and other automotive EPS products. The rights to EPS technologies from both parties will be transferred to Hubei KYB with full technical support for the R&D department. Hubei KYB plans to invest approximately RMB960M and have registered capital of RMB320M. It expects to have an annual production capacity target of 5M units to significantly penetrate the Chinese and the global EPS markets. CAAS's participation will be RMB213.12M for a 66.6% ownership, funded by in-kind and cash, which include the transfer of intellectual property, equipment for EPS production and cash. The board will consist of five directors, three of whom will be appointed by CAAS including the chairman.The joint venture will lease its operating headquarter offices and factory buildings from the existing CAAS facilities in Jingzhou City. Hubei KYB will establish an independent R&D department in Wuhan City, Hubei Province, to research and develop new products and technologies. In addition, CAAS and KYB plan to transfer all their current EPS business in the Chinese market, including the business of KYB's Japanese customers in China, to Hubei KYB.