Why China Automotive Systems Stock Is Gaining On Wednesday

China Automotive Systems, Inc. (NASDAQ:CAAS) shares are trading higher on Wednesday following the company’s announcement that it has begun mass production of its second-generation electro-hydraulic power steering system for heavy-duty vehicles.

Developed by its subsidiary Shashi Jiulong, the intelligent system, known as iRCB, is the first in China to support L2+ assisted driving capabilities for commercial applications.

The company said the iRCB system combines hydraulic force with electronic control for precision steering and significant energy efficiency.

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After entering mass production earlier this year, the system exceeded expectations, leading to a surge in new orders in July and marking a record pace for product ramp-up in the power steering sector.

Headquartered in Hubei Province, China Automotive Systems supplies steering components through 16 joint ventures and subsidiaries, servicing major clients like BYD Co., Ltd. (OTC:BYDDY), Stellantis N.V. (NYSE:STLA), and Ford Motor Company (NYSE:F).

The company has a production capacity exceeding 8 million units annually, covering steering gears, columns, and hoses for a variety of vehicle types.

Qizhou Wu, CEO of China Automotive Systems, noted the innovation behind the product, stating, “We continue to pioneer proprietary steering technologies that deliver cutting-edge solutions for our customers.”

Wu added that the new iRCB system is expected to contribute significantly to sales growth in 2025, backed by its performance and cost-efficiency.

China Automotive Systems completed the full lifecycle, from design to validation and production, of the iRCB system within just eight months. The company attributed this rapid development to its close collaboration with customers and focus on innovation.

According to internal estimates, the system can save up to 36,000 Chinese yuan ($5,018.09) per vehicle per year, representing substantial operational cost reductions for fleet operators.

The new steering system represents a strategic move for China Automotive Systems as China continues to lead in autonomous and semi-autonomous vehicle technologies.

The iRCB’s integration of L2+ driver assistance functionality positions the firm to capture the growing demand for smart mobility solutions in both domestic and international markets.

Price Action: CAAS shares are trading higher by 4.17% to $4.250 at last check Wednesday.

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