First Quarter 2011 Results

• Net sales rose 8.1% to $91.0 million, compared to $84.2 million in the first quarter of 2010;
• Gross profit was $20.0 million, compared to $22.5 million for the comparative quarter in prior year; Gross margin was 22.0% in the 2011 first quarter;
• Research and development expenses rose approximately $1.0 million to $2.3 million;
• Net income attributable to the parent company's common shareholders was $17.2 million, or diluted earnings per share of $0.23, versus a loss of $4.1 million, or $0.15 loss per share, in the 2010 first quarter; and
• Cash and cash equivalents were $40.6 million at March 31, 2011.

Net sales were $91.0 million for the three months ended March 31, 2011, compared with $84.2 million for the first quarter ended March 31, 2010, an increase of $6.8 million, or 8.1%. Sales rose because of increased sales of the Company's new Electronic Power Steering ("EPS") system, an increase in export sales and the appreciation of the RMB against the U.S. dollar.

In the first quarter of 2011, the Company's gross profit was $20.0 million, compared to $22.5 million in the first quarter of 2010. The first quarter 2011 gross margin was 22.0%, versus 26.8% in the same quarter in 2010, mainly due to sales price declines exceeding unit cost reductions. Gross margin in the fourth quarter of 2010 was 20%.

Selling expenses in the first quarter of 2011 increased $0.5 million to $2.4 million, from $1.9 million in the first quarter of 2010. Higher warehouse rental expenses related to an increase in the rented area, due to the need to accommodate higher sales volumes, and greater transportation expenses, which reflected both an increase in oil prices as well as a greater number of units being sold. As a percentage of sales, selling expenses were 2.7% in the first quarter of 2011, compared to 2.2% in the first quarter of 2010.

General and administrative expenses were flat at $3.9 million in both the 2011 and 2010 first quarters.

Research and development expenses rose by approximately $1.0 million to $2.3 million in the first quarter of 2011, compared to $1.3 million for the three months ended March 31, 2010. Demand for EPS is rising and to market EPS more quickly, CAAS added senior technicians and advanced manufacturing and testing equipment to the research and development program. As a percentage of sales, R&D expenses rose to 2.5% from 1.5% in the first quarter of last year.

Income from operations was $11.7 million for the three months ended March 31, 2011, versus $15.9 million in the first quarter of 2010. The decline of $4.2 million resulted primarily from lower gross profit and higher operating expenses compared to the first quarter of 2010. As a result, operating margin was 13% in the first quarter of 2011, as compared to 19% in the same period last year, but higher than the 12% in the fourth quarter of 2010.

Financial expenses increased $0.6 million to $1.1 million for the three months ended March 31, 2011, compared to $0.5 million for the first quarter of 2010. This increase was primarily due to the fact that (a) beginning on February 15, 2011, the Company accrued interest at the rate of 13% according to the terms of the Convertible Notes, and during the three months ended March 31, 2010, the Company accrued interest at the rate of 11%; and (b) the interest and make-whole accrual required for the redemption date on February 15, 2010 was lower as a substantial portion of the interest and make-whole was already accrued for when the WAP default occurred in fiscal 2009 and hence, the lower financial expense.

For the first quarter of 2011, the gain on the change in fair value of the derivative was $11.7 million versus a loss of $14.2 million for the same period of 2010. During the three months ended March 31, 2011, the Company's common stock market price dropped from the beginning of the year, thereby decreasing the intrinsic value of the embedded conversion feature and the fair value of the compound derivative liabilities, as well as increasing the gain on the change in the fair value of the derivatives. In the 2010 first quarter, CAAS's common stock market price rose from the beginning of the year. The intrinsic value of the embedded conversion feature and the fair value of the compound derivative liabilities increased, and the loss on the change in the fair value of the derivatives rose.

During the three months ended March 31, 2011, the gain on the Convertible Notes conversion was $1.6 million, compared to no gain in the first quarter of 2010. On March 1, 2011, an investor converted $6.4 million of the Convertible Notes principal at a conversion price of $7.0822 per share. CAAS issued 907,708 shares of its common stock to the investor. On the conversion date, the market price of the common shares issued was $10.1 million ($11.14 per share) and the value of the conversion consideration was $11.7 million including $6.4 million of principal, $1.5 million of coupon interest and make-whole amount payable, and $3.7 million of derivative liabilities under such principal. A gain of $1.6 million was recorded on the Convertible Notes conversion representing the difference between the stock's market price and the conversion consideration.

Income before income taxes increased $22.8 million to $24.0 million in the 2011 first quarter compared with $1.2 million for the three months ended March 31, 2010. This increase included a decrease in income from operations of $4.2 million, an increase in financial expenses of $0.6 million, an increase in the gain on change in the fair value of the derivative of $25.9 million and an increase in the gain on Convertible Notes conversion of $1.6 million.

For the three months ended March 31, 2011, net income attributable to the parent company's common shareholders was $17.2 million, versus a net loss of $4.1 million in the first quarter of last year. This increase included a $23.1 million rise in net income, a decrease of $0.6 million in noncontrolling interest and the $2.5 million allocation to convertible notes holders. The weighted average number of basic common shares outstanding was 27,478,395 in the 2011 first quarter compared to 27,046,244 in the 2010 quarter. The weighted average number of diluted common shares outstanding was 31,558,363 in the 2011 first quarter compared to 27,046,244 in 2010.

As of March 31, 2011, total cash and cash equivalents were $40.6 million. Working capital was $123.9 million at the end of March 2011. Cash used to acquire property, plant and equipment for capacity expansion was $6.1 million for the three months ended March 31, 2011.

Non-GAAP Measures

For the three months ended March 31, 2011, adjusted net income attributable to the parent company (Non-GAAP) was $6.9 million versus adjusted net income attributable to the parent company of $10.3 million in the first quarter last year. Adjusted diluted earnings per share was $0.22 for the three months ended March 31, 2011 versus adjusted diluted earnings per share of $0.33 for same period of 2010.

Reconciliation of GAAP to Non-GAAP results:

To supplement our unaudited condensed consolidated financial statements presented in accordance with generally accepted accounting principles (U.S. GAAP), we use non-GAAP measures of net income attributable to parent company and earnings per share, which are adjusted from results based on U.S. GAAP to exclude certain expenses, gains and losses associated with the Company's Convertible Notes. These non-GAAP financial measures are provided to enhance the user's overall understanding of our current financial performance and our prospects for the future. Specifically, we believe the non-GAAP results provide useful information to both management and investors, as these non-GAAP results exclude certain expenses, gains and losses that we believe are not indicative of our core operating results, because these are consistent with the financial models and estimates published by many analysts who follow the Company, and these non-GAAP results assist in evaluating the Company's operating performance compared with that of other companies in its industry. These non-GAAP results are some of the primary indicators management uses for assessing our performance, allocating resources and planning, and forecasting future periods. Further, management uses non-GAAP information that excludes certain non-cash charges such as accrued make-whole redemption interest expense and allocation to Convertible Notes holders associated with our Convertible Notes, as these non-GAAP items do not reflect the cash operating results of the business or the ongoing results.

Non-GAAP net income attributable to parent company and earnings per share are not measures of performance under accounting principles generally accepted in the United States (U.S. GAAP). The Company includes them in this press release in order to:

• improve transparency for investors;
• assist investors in their assessment of the Company's performance;
• facilitate comparisons to historical performance;
• ensure that these measures are fully understood in light of how the Company evaluates its operating results; and
• properly define the metrics used and confirm their calculation.

These non-GAAP results should not be regarded as a substitute for corresponding U.S. GAAP measures, but instead utilized as a supplemental measure of operating performance in evaluating the Company's business. The Company recognizes that the usefulness of non-GAAP measures of net income attributable to parent company and earnings per share has certain limitations, including:

• non-GAAP net income attributable to parent company and earnings per share do not include certain gains and losses associated with the Company's Convertible Notes. Because the Convertible Notes are a recurring, non-cash item, related gains and losses are a necessary element of the Company's costs and ability to generate profits and cash flows. Therefore, any measure that excludes certain gains and losses associated with the Company's Convertible Notes may have material limitations; and
• the manner in which the Company calculates non-GAAP net income attributable to parent company and earnings per share may differ from that of other companies, which limits their usefulness as a comparative measure.

The Company compensates for the foregoing limitations by using non-GAAP net income attributable to parent company and earnings per share as comparative tools, together with U.S. GAAP measurements, to assist in the evaluation of its operating performance. As such, these non-GAAP measures should be viewed in conjunction with the Company's financial statements prepared in accordance with U.S. GAAP, as presented above and in "Management's Discussion and Analysis of Financial Condition and Results of Operations" in the Company's Quarterly Report on Form 10-Q as filed with the Securities and Exchange Commission on July 22, 2011.

Business Outlook

Management's revenue guidance is for 15% year-over-year growth for the 2011 year. This target is based on the Company´s current views on operating and market conditions, which are subject to change.

About China Automotive Systems, Inc.

Based in Hubei Province, the People's Republic of China, China Automotive Systems, Inc. is a leading supplier of power steering components and systems to the Chinese automotive industry, operating through nine Sino-foreign joint ventures. The Company offers a full range of steering system parts for passenger automobiles and commercial vehicles. The Company currently offers four separate series of power steering with an annual production capacity of over 3.5 million sets, steering columns, steering oil pumps and steering hoses. Its customer base is comprised of leading Chinese auto manufacturers, such as China FAW Group, Corp., Dongfeng Auto Group Co., Ltd., BYD Auto Company Limited, Beiqi Foton Motor Co., Ltd., Chery Automobile Co., Ltd. and Chrysler North America outside of North America. For more information, please visit: http://www.caasauto.com.

Forward Looking Statements

This press release contains statements that are "forward-looking statements" as defined under the Private Securities Litigation Reform Act of 1995. Forward-looking statements represent our estimates and assumptions only as of the date of this press release. These forward-looking statements include statements regarding the qualitative and quantitative effects of the accounting errors, the periods involved, the nature of the Company's review and any anticipated conclusions of the Company or its management and other statements that are not historical facts. Our actual results may differ materially from the results described in or anticipated by our forward-looking statements due to certain risks and uncertainties. As a result, the Company's actual results could differ materially from those contained in these forward-looking statements due to a number of factors, including those described under the heading "Risk Factors" in the Company's Form 10-K annual report filed with the Securities and Exchange Commission on June 28, 2011, and in documents subsequently filed by the Company from time to time with the Securities and Exchange Commission. We expressly disclaim any duty to provide updates to any forward-looking statements made in this press release, whether as a result of new information, future events or otherwise.

For further information, please contact:

Jie Li
Chief Financial Officer
China Automotive Systems, Inc.
Email: jieli@chl.com.cn

Kevin Theiss
Investor Relations
Grayling
Tel: +1-646-284-9409
Email: kevin.theiss@grayling.com

(Tables Follow)

SOURCE China Automotive Systems, Inc.

    2010 First Quarter Highlights:
    -- Net sales increased 88% YoY to a new first quarter sales record of
       $84.2 million;
    -- Gross margin was 26.8% versus 24.4% a year ago and 23.8% in Q4 2009;
    -- Operating income climbed 124.1% YoY to a quarterly record $16 million;
    -- Net income rose 357.6% YoY to a quarterly record $10.3 million; diluted
       EPS at quarterly record $0.34;
    -- Cash and equivalents were $51.1 million at March 31, 2010;
    -- Net cash flow from operations was $13.5 million.

Net sales for the first quarter of 2010 represented an 88.5% year-over-year increase to $84.2 million, the highest first quarter sales in the Company's history, versus $44.7 million in the 2009 first quarter. All of the revenue increase was due to organic growth.

Gross profit in the first quarter of 2010 was $22.5 million, a 106.7% or $11.6 million year-over-year increase, compared with $10.9 million for the same quarter in 2009. The gross margin in the first quarter of 2010 was 26.8%, compared with 24.4% a year ago and 23.8% in the preceding quarter. The Company has reclassified warranty expenses from selling expenses to cost of goods sold. Without giving effect to this reclassification, gross margin in the first quarter of 2010 would have been 30.2%, compared with 27.3% a year ago and 29.0% in the preceding quarter. Details of the reclassification are set forth in the table below.

    Selling expenses in the first quarter were $1.9 million as compared to
$1.1 million in the same quarter a year ago, but declined from the $3.2
million reported in the 2009 fourth quarter. Selling expenses as a percentage
of revenue for the first quarter of 2010 were 2.2% as compared to 2.4% for the
same period in 2009.


    Reclassification table:

                                     First quarter, 2010   First quarter, 2009
    Net sales                              $84,232,689           $44,697,446
    Cost of goods sold before
     reclassification                       58,778,370            32,499,615
    Gross profit before
     reclassification                       25,454,319            12,197,831
    Gross margin before
     reclassification                            30.2%                 27.3%
        Warranty expenses                    2,919,302             1,294,486
    Cost of goods sold after
     reclassification                       61,697,672            33,794,101
    Gross profit after
     reclassification                       22,535,017            10,903,345
    Gross margin after
     reclassification                            26.8%                 24.4%

    Selling expenses before
     reclassification                        4,787,105             2,359,166
         Minus: Warranty expenses            2,919,302             1,294,486
    Selling expenses after
     reclassification                       $1,867,803            $1,064,680

General and administrative (G&A) expenses in the first quarter were $3.6 million as compared to $1.8 million in the same quarter a year ago, but were lower than the $5.5 million in the 2009 fourth quarter. G&A expenses as a percentage of revenue for the first quarter of 2010 were 4.3% as compared to 4.0% for the same period in 2009. Research and development (R&D) expenses rose to $1.3 million in the 2010 first quarter from $439,922 for the first quarter of 2009 as the Company continues to invest in R&D for new products.

Operating income increased by 124.1% year-over-year to $15.9 million in the first quarter of 2010, compared with $7.1 million in the 2009 first quarter, and was 71.7% above the 2009 fourth quarter. The operating margin was almost 19% in the 2010 first quarter versus 15.9% in the same quarter in 2009 and rose significantly compared with 11.1% in the fourth quarter of 2009.

Net income attributable to common shareholders was $10.3 million for the first quarter, or $0.34 per diluted share, compared with $2.3 million, or $0.08 per diluted share in the same quarter in 2009. The net margin for net income attributable to common shareholders rose to 12.3% in the 2010 first quarter from 5.1% in the first quarter of 2009 and from 7.8% in the fourth quarter of 2009. The diluted weighted average shares outstanding were 31.6 million in the first quarter of 2009, compared with 31.9 million at the end of March in 2009.

As of March 31, 2010, total cash and cash equivalents were $51.5 million, as compared with $37.6 million as of March 31, 2009. Stockholders' equity increased to $116.0 million as of March 31, 2010 from $105.7 million as of December 31, 2009. Working capital grew by 67.5% versus a year ago and reached $70.0 million. Net cash flow from operations was $13.5 million for the three months ended March 31, 2010.

Mr. Qizhou Wu, Chief Executive Officer of China Automotive Systems, commented, "We are encouraged by our first quarter result and long term growth potential of world's largest auto nation. With the high saving account balance, Chinese consumers are increasing consumption of durable goods. Auto, as the second highest price tag after housing, remains a natural candidate for Chinese consumers. Auto is also the largest beneficiary of the changing life styles in China, as it gives Chinese people more freedom to travel within and outside of the cities."

"China Automotive Systems' near-term execution and long-term strategy remain intact. We continue to focus on expansion within existing customers and penetration into new customers. Our closer relationships with large OEMs help improve their margins and enhance their competitiveness in the marketplace. Our track record and progression with Chery Auto, BYD, Geely and Brilliance, all speak volumes for the successful implementation of our growth strategy. As we continue to win contracts from more high-quality OEMs who have proven growth records, we have gradually established a large customer base and ability to optimize production cycles to meet the surging needs of the top sellers. This is the reason why we can consistently outgrow the overall auto market in China," Mr. Wu concluded.

Recent Developments

On February 24, 2010, the Board of Directors increased the registered capital of Hengsheng, one of the Company's subsidiaries, to $16 million from $10 million. The additional investment has been completed and is planned for expanding the plant and the addition of new machinery and equipment. The investment was funded by the Company's working capital balances.

On January 24, 2010, the Company announced that its subsidiary Great Genesis Holdings Limited signed a definitive agreement to form a joint venture ("JV") with the Beijing Hainachuan Auto Parts Co. Ltd., subsidiary of Beijing Automobile Industrial Holdings ("Beijing Auto"). The new joint venture, Beijing Hailong Automotive System Co., Ltd., will design, develop and manufacture both hydraulic and electric power steering systems and parts at competitive prices to meet the growing power steering needs of Beijing Auto. A new production facility is expected to be completed and operational within 18 months with a designed capacity for 300,000 units of hydraulic and 200,000 units of electric power steering systems plus parts.

On January 22, 2010, the Company announced that its previously announced OEM in North America was Chrysler. Exports to the U.S. for the award-winning Jeep Wrangler had begun in mid-2009 and were continuing.

2010 Outlook

Management raised revenue guidance to 25% year-over-year growth for the 2010 year. This target is based on the Company's current views on operating and market conditions, which are subject to change.

Conference Call

Management will conduct a conference call on Thursday, May 6th at 8:00 a.m. Eastern Daylight Time to discuss these results. A question and answer session will follow management's presentation.

To participate, please call the following numbers 10 minutes before the call start time and ask to be connected to the "China Automotive Systems" conference call:

Phone Number: +1-877-407-9205 (North America)

Phone Number: +1-201-689-8054 (International)

In addition, the conference call will be broadcast live over the Internet at: http://www.caasauto.com or , China Automotive Systems, Inc. is a leading supplier of power steering components and systems to the Chinese automotive industry, operating through nine Sino-foreign joint ventures. The Company offers a full range of steering system parts for passenger automobiles and commercial vehicles. The Company currently offers 4 separate series of power steering with an annual production capacity of over 2.5 million sets, steering columns, steering oil pumps and steering hoses. Its customer base is comprised of leading Chinese auto manufacturers such as China FAW Group, Corp., Dongfeng Auto Group Co., Ltd., BYD Auto Company Limited, Beiqi Foton Motor Co., Ltd. and Chery Automobile Co., Ltd.. For more information, please visit: http://www.caasauto.com .

Safe Harbor Statement

This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations or beliefs, including, but not limited to, statements concerning the Company's operations, financial performance and condition and the impact of acquisitions on its financial performance. For this purpose, statements that are not statements of historical fact may be deemed to be forward-looking statements. The Company cautions that these statements by their nature involve risks and uncertainties, and actual results may differ materially depending on a variety of important factors, including, among others, the impact of competitive products, pricing and new technology; changes in demand for the Company's products; changes in consumer preferences and tastes and effectiveness of marketing; changes in laws and regulations; fluctuations in costs of production, delays and cost overruns related to developing and opening new production facilities; and other factors as discussed in the Company's reports filed with the Securities and Exchange Commission from time to time.

    For further information, please contact:

     Jie Li
     Chief Financial Officer
     China Automotive Systems
     Email: jieli@chl.com.cn

     Kevin Theiss
     Investor Relations
     Grayling
     Tel:   +1-646-284-9409
     Email: kevin.theiss@grayling.com



                        China Automotive Systems, Inc.
                    Condensed Consolidated Balance Sheets

                                           March 31, 2010   December 31, 2009
                                          (US$, Unaudited)

    ASSETS
    Current assets:
    Cash and cash equivalents             $    51,075,033   $     43,480,176
    Pledged cash deposits                      13,976,353         12,742,187
    Accounts and notes receivable, net,
     including $1,526,905 and $1,441,939
     from related parties at March 31,
     2010 and December 31, 2009               168,252,346        154,863,292
    Advance payments and other,
     including $1,080,591 and $0 to
     related parties at March 31,
     2010 and December 31, 2009                 7,549,606          2,413,556
    Inventories                                35,383,898         27,415,697
    Current deferred tax assets                 1,555,114          1,381,868
    Total current assets                  $   277,792,350   $    242,296,776
    Long-term Assets:
    Property, plant and equipment, net    $    60,605,816   $     60,489,798
    Intangible assets, net                        516,052            561,389
    Other receivables, net, including
     $332,955 and $65, 416 from related
     parties at March 31, 2010 and
     December 31, 2009                          1,950,782          1,064,224
    Advance payments for property,
     plant and equipment, including
     $1,962,472 and $2,579,319 to
     related parties at March 31,
     2010 and December 31, 2009                 8,323,825          6,369,043
    Long-term investments                          79,106             79,084
    Non-current deferred tax assets             2,447,578          2,172,643
    Total assets                          $   351,715,509   $    313,032,957
    LIABILITIES AND STOCKHOLDERS'
     EQUITY
    Current liabilities:
    Bank loans                            $     4,394,767   $      5,125,802
    Accounts and notes payable,
     Including $2,685,916 and
     $1,537,827 to related parties
     at March 31, 2010 and December
     31, 2009                                 124,659,294        107,495,833
    Convertible notes payable                  28,747,192         28,640,755
    Derivative liabilities                        730,981            880,009
    Customer deposits                           6,894,977          1,918,835
    Accrued payroll and related costs           3,039,446          3,040,705
    Accrued expenses and other payables        22,381,164         17,708,681
    Accrued pension costs                       3,859,241          3,778,187
    Taxes payable                              12,899,736         11,365,016
    Amounts due to
     shareholders/directors                       186,888                 --
    Total current liabilities             $   207,793,686   $    179,953,823
    Long-term liabilities:
    Advances payable                              234,007            233,941
    Total liabilities                     $   208,027,693   $    180,187,764
    Significant concentrations
    Related party transactions
    Commitments and contingencies
    Subsequent events
    Stockholders' equity:
    Preferred stock, $0.0001 par value -
     Authorized - 20,000,000 shares
     Issued and outstanding - None        $            --   $             --
    Common stock, $0.0001 par value -
     Authorized - 80,000,000 shares
     Issued and Outstanding -
     27,046,244 shares at March 31,
     2010 and December 31, 2009                     2,704              2,704
    Additional paid-in capital                 27,515,064         27,515,064
    Retained earnings -
    Appropriated                                8,324,533          8,324,533
    Unappropriated                             68,977,192         58,642,023
    Accumulated other comprehensive
     income                                    11,225,521         11,187,744

    Total parent company stockholders'
     equity                                   116,045,014        105,672,068
    Non-controlling interests                  27,642,802         27,173,125
    Total stockholders' equity            $   143,687,816   $    132,845,193
    Total liabilities and stockholders'
     equity                               $   351,715,509   $    313,032,957



                        China Automotive Systems, Inc.
       Condensed Consolidated Statements of Operations (US$, Unaudited)

                                               Three Months Ended March 31,
                                                    2010           2009
    Net product sales, including $1,660,393
     and $559,011 to related parties for
     the three months ended March 31, 2010
     and 2009                                  $  84,232,689  $  44,697,446
    Cost of product sold, including
     $4,347,288 and $2,126,737 purchased
     from related parties for the three
     months ended March 31, 2010 and 2009         61,697,672     33,794,101
    Gross profit                                  22,535,017     10,903,345
    Add: Gain on other sales                         451,610         66,879
    Less: Operating expenses -
    Selling expenses                               1,867,803      1,064,680
    General and administrative expenses            3,604,784      1,801,702
    R&D expenses                                   1,301,758        439,922
    Depreciation and amortization                    321,793        571,413
    Total Operating expenses                       7,096,138      3,877,717
    Income from operations                        15,890,489      7,092,507
    Add: Other income, net                            15,528             --
    Financial income (expenses) net                 (368,011)      (439,480)
    Gain on change in fair value of
     derivative                                      149,028     (1,560,848)
    Income before income taxes                    15,687,034      5,092,179
    Less: Income taxes                             2,285,522      1,449,670
    Net income                                 $  13,401,512  $   3,642,509
    Net income attributable to
     noncontrolling interest                       3,066,343      1,383,697
    Net income attributable to parent
     company                                   $  10,335,169  $   2,258,812
    Net income per common share
     attributable to parent company -
    Basic                                      $        0.38  $        0.08
    Diluted                                    $        0.34  $        0.08
    Weighted average number of common
     shares outstanding -
    Basic                                         27,046,244     26,983,244
    Diluted                                       31,564,462     31,947,823



                        China Automotive Systems, Inc.
       Condensed Consolidated Statements of Cash Flows (US$, Unaudited)

                                           Three Months Ended March 31,
                                                 2010           2009
    Cash flows from operating
     activities:
    Net income                              $ 13,401,512   $  3,642,509
    Adjustments to reconcile net income
     from continuing operations to
     net cash provided by operating
     activities:
    Depreciation and amortization              2,358,266      2,026,816
    Allowance for doubtful accounts              218,944       (650,590)
    (Recovered)
    Deferred income taxes assets                (447,191)       112,451
    Amortization for discount of
     convertible note payable                    106,437        122,347
    (Gain) loss on change in fair value
     of derivative                              (149,028)      1560,848
    Other operating adjustments                       99         (1,234)
    Changes in operating assets and
     liabilities:
    (Increase) decrease in:
    Pledged deposits                          (1,230,619)    (1,102,026)
    Accounts and notes receivable            (13,455,446)    (6,482,746)
    Advance payments and other                (5,135,625)      (779,329)
    Inventories                               (7,960,570)    (1,379,040)
    Accounts and notes payable                17,133,541      7,069,389
    Customer deposits                          4,976,051        280,763
    Accrued payroll and related costs             (2,105)        90,811
    Accrued expenses and other payables        2,063,614        690,931
    Accrued pension costs                         80,002        (91,254)
    Taxes payable                              1,531,557      3,779,564
    Net cash provided by operating
     activities                             $ 13,489,439   $  8,890,210
    Cash flows from investing
     activities:
    (Increase) decrease in other
     receivables                                (979,428)      (111,395)
    Cash received from equipment sales           237,457         34,020
    Cash paid to acquire property, plant
     and equipment                            (4,616,312)    (4,296,391)
    Cash paid to acquire intangible
     assets                                       (2,504)      (292,573)
    Net cash (used in) investing
     activities                             $ (5,360,787) $  (4,666,339)
    Cash flows from financing
     activities:
    Proceeds from (repayment of) bank
     loans                                      (732,462)    (2,194,298)
    Dividends paid to the non-controlling
     interest holders of Joint-venture
     companies                                        --     (1,550,637)

    (Decrease) in amounts due to
     shareholders/directors                      186,845             --
    Net cash provided by (used in)
     financing activities                   $   (545,617)  $ (3,744,935)
    Cash and cash equivalents effected
     by foreign currency                    $     11,822   $     (7,020)
    Net increase in cash and cash
     equivalents                               7,594,857        471,916
    Cash and cash equivalents at
     beginning of period                      43,480,176     37,113,375
    Cash and cash equivalents at end of
     period                                 $ 51,075,033   $ 37,585,291

The new JV will be a 50%/50% ownership between CAAS and Beijing Auto, respectively. Four members of the JV's 7-person Board of Directors will be appointed by CAAS with the remaining 3 members appointed by Beijing Auto.

A new production facility is expected to be completed and operational within 18 months with a designed capacity for 300,000 units of hydraulic and 200,000 units of electric power steering systems plus parts. This structure will be located approximately 70 kilometers from the Beijing airport and 110 kilometers from the port at Tianjin to provide cost-effective shipping. The total investment is expected to approximate $20 million, with $10 million expended in the first 12 months, to be equally shared by both JV partners.

The CAAS Research Institute will work closely with the Beijing Auto Research Institute to develop the new steering models to meet the specific needs for the vehicles produced by Beijing Auto.

Mr. Hanlin Chen, Chairman of China Automotive Systems, commented, "We are very excited that Beijing Auto has selected CAAS as its trusted strategic partner for these key safety-related steering units to support their expansion plans. This JV is another milestone after our JV with Chery Auto in 2007, and Beijing Auto adds to our list of leading Chinese brands who rely on us for advanced, highly reliable steering units. Our new JV is further acknowledgement of our design and manufacturing expertise."

Beijing Automotive Industry Holding Co., Ltd. is a state-owned enterprise and has been a pioneer in China's automotive industry for a half century. It is one of China's major auto production bases and among the 8 largest automobile groups in China. It is comprised of tens of production factories and research institutes to produce 700,000 vehicles per year plus parts, in major categories such as jeeps, light-duty and commercial trucks, vans and automobiles. Among its operations are Beiqi Foton Motor Co., Ltd., Beijing Hyundai Motor Co., Ltd., Beijing Benz - Daimler Chrysler Automotive Co., Ltd. and Beijing Automobile Works Co., Ltd.

About China Automotive Systems, Inc.

Based in Hubei Province, People's Republic of China, China Automotive Systems, Inc. is a leading supplier of power steering components and systems to the Chinese automotive industry, operating through eight Sino-foreign joint ventures. The Company offers a full range of steering system parts for passenger automobiles and commercial vehicles. The Company currently offers 4 separate series of power steering with an annual production capacity of over 2.5 million sets, steering columns, steering oil pumps and steering hoses. Its customer base is comprised of leading Chinese auto manufacturers such as China FAW Group, Corp., Dongfeng Auto Group Co., Ltd., BYD Auto Company Limited, Beiqi Foton Motor Co., Ltd. and Chery Automobile Co., Ltd., etc. For more information, please visit: http://www.caasauto.com

Safe Harbor Statement

This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations or beliefs, including, but not limited to, statements concerning the Company's operations, financial performance and condition and the impact of acquisitions on its financial performance. For this purpose, statements that are not statements of historical fact may be deemed to be forward-looking statements. The Company cautions that these statements by their nature involve risks and uncertainties, and actual results may differ materially depending on a variety of important factors, including, among others, the impact of competitive products, pricing and new technology; changes in demand for the Company's products; changes in consumer preferences and tastes; and effectiveness of marketing; changes in laws and regulations; fluctuations in costs of production, delays and cost overruns related to developing and opening new production facilities; and other factors as those discussed in the Company's reports filed with the Securities and Exchange Commission from time to time.

    For further information, please contact:

     Jie Li
     Chief Financial Officer
     China Automotive Systems
     Email: jieli@chl.com.cn

     Kevin Theiss
     Investor Relations
     Grayling
     Phone: +1-646-284-9409
     Email: kevin.theiss@us.grayling.com

Part of the Company's ceremony included the ground breaking for the new Henglong Research and Development Center. After Mr. Hanlin Chen, CAAS Chairman's opening remarks, Mr. Xiangxi Wang, the Mayor of Jingzhou City, also provided remarks and presented the Exports Special Contribution Award to CAAS. Chrysler representative Mr. Peter Zhou, Chrysler's Director of Supplier Quality China and Taiwan presented the Proof of Certified Supplier certificate to China Automotive Systems based on the Company's performance in delivering the power steering gears.

Chrysler conducted an initial screen and review of CAAS's research and development capacity, quality control and production capabilities as part of the supplier development process. CAAS and Chrysler next created a framework for their future joint development. The Company successfully passed several product evaluations and road tests resulting in Chrysler accepting the Company's power steering gears and issuing a purchase order.

Mr. Hanlin Chen, Chairman of China Automotive Systems, commented, "We are very excited about our strengthening relationship with Chrysler and the deep potential for the vast North American OEM market. Chrysler's order boosted our confidence to continue to develop and produce reliable power steering systems reaching the highest quality standards required by the world's most sophisticated auto manufacturers."

During the ceremony today, CAAS also 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. The Company is currently supplying this EPS system at a rate of 2,000 units per month to Suzuki Auto Ltd. in China.

Mr. Qizhou Wu, CEO of China Automotive Systems, concluded, "We are also very pleased about the steady commercialization progress of our EPS products. Given the benefit of improving overall fuel efficiency, EPS systems are widely adopted by OEMs in Europe and gradually expanding market share in the U.S. OEM market. Although EPS systems are relatively new in China, we see great potential for EPS in China, the world's largest automotive market. We are proud to be the first Chinese power steering producer to introduce a domestically designed and manufactured product to compete with imported systems in the fast growing Chinese automotive market."

Conference Call

Management will host a conference call today at 8:00 a.m. Eastern Standard Time.

To participate, please call the following numbers 10 minutes before the call start time and ask to be connected to the "China Automotive Systems" conference call:

Phone Number: +1-877-407-9205 (North America)

Phone Number: +1-201-689-8054 (International)

A telephone replay of the call will be available after the conclusion of the conference call through 11:59 PM Eastern Standard Time on Friday, February 5, 2010. The dial-in details for the replay are: U.S. Toll Free Number +1-877-660-6853, International dial-in number +1-201-612-7415; using Account "286" and Conference ID "342781" to access the replay.

About China Automotive Systems, Inc.

Based in Hubei Province, People's Republic of China, China Automotive Systems, Inc. is a leading supplier of power steering components and systems to the Chinese automotive industry, operating through eight Sino-foreign joint ventures. The Company offers a full range of steering system parts for passenger automobiles and commercial vehicles. The Company currently offers 4 separate series of power steering with an annual production capacity of over 2.5 million sets, steering columns, steering oil pumps and steering hoses. Its customer base is comprised of leading Chinese auto manufacturers such as China FAW Group, Corp., Dongfeng Auto Group Co., Ltd., BYD Auto Company Limited, Beiqi Foton Motor Co., Ltd. and Chery Automobile Co., Ltd., etc. For more information, please visit: http://www.caasauto.com

Safe Harbor Statement This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations or beliefs, including, but not limited to, statements concerning the Company's operations, financial performance and, condition and the impact of acquisitions on its financial performance. For this purpose, statements that are not statements of historical fact may be deemed to be forward-looking statements. The Company cautions that these statements by their nature involve risks and uncertainties, and actual results may differ materially depending on a variety of important factors, including, among others, the impact of competitive products, pricing and new technology; changes in demand for the Company's products; changes in consumer preferences and tastes; and effectiveness of marketing; changes in laws and regulations; fluctuations in costs of production, delays and cost overruns related to developing and opening new production facilities; and other factors as those discussed in the Company's reports filed with the Securities and Exchange Commission from time to time.

    For further information, please contact:

     Jie Li
     Chief Financial Officer
     China Automotive Systems
     Email: jieli@chl.com.cn

     Kevin Theiss
     Investor Relations
     Grayling
     Tel:   +1-646-284-9409
     Email: kevin.theiss@us.grayling.com

Guangxun Xu served as the Chief Representative of NASDAQ in China the past two years and was a managing director with the NASDAQ Stock Market International, Asia for over 10 years. He also served as an independent director of China Automotive Systems in 2006. Mr. Xu's professional finance career spans over 25 years. His practice focuses on services for US and UK listings, advising on and arranging corporate and project financings, pre-IPO restructuring, M&A, corporate governance and compliance, post-IPO IR, etc. He holds an MBA from Middlesex University, London.

Bruce Carlton Richardson served as CFO and Secretary of Dalian RINO International Environmental Engineering from October 2007 to September 2008. Formerly, he was a Managing Director of Xinhua Finance, a Senior Analyst at Evolution Securities China Limited and a Director of New Access Capital, all in Shanghai. From 2001 through May 2003, he was a private consultant for the Chinese financial markets. Mr. Richardson earned a BA in Classics from the University of Notre Dame in 1980, graduated with an MA in International Management from the University of Texas, Dallas, and he was awarded a graduate study grant by the US National Academy of Sciences. He completed a year of post-graduate research on PRC accounting at the People's University in 1988.

Mr. Hanlin Chen, Chairman, commented, "We welcome Mr. Bruce Carlton Richardson to our Board of Directors. We also welcome Mr. Guangxun Xu back. We believe that their extensive experience and expertise will help move China Automotive Systems to a higher level to achieve its strategic goals. We also thank Dr. Haimian Cai for his past contributions to the Board and look forward to his leadership at our subsidiary Henglong USA."

Committee chairman were appointed as follows: Mr. Thomson has been appointed the Chairman of the Audit Committee; Mr. Richardson is the Chairman of the Compensation Committee; and Mr. Xu is the Chairman of Nomination Committee.

About China Automotive Systems, Inc.

Based in Hubei Province, People's Republic of China, China Automotive Systems, Inc. is a leading supplier of power steering components and systems to the Chinese automotive industry, operating through eight Sino-foreign joint ventures. The Company offers a full range of steering system parts for passenger automobiles and commercial vehicles. The Company currently offers 4 separate series of power steering with an annual production capacity of over 1.8 million sets, steering columns, steering oil pumps and steering hoses. Its customer base is comprised of leading Chinese auto manufacturers such as China FAW Group, Corp., Dongfeng Auto Group Co., Ltd., BYD Auto Company Limited, Beiqi Foton Motor Co., Ltd. and Chery Automobile Co., Ltd., etc. For more information, please visit: http://www.caasauto.com

Safe Harbor Statement

This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations or beliefs, including, but not limited to, statements concerning the Company's operations, financial performance and, condition and the impact of acquisitions on its financial performance. For this purpose, statements that are not statements of historical fact may be deemed to be forward-looking statements. The Company cautions that these statements by their nature involve risks and uncertainties, and actual results may differ materially depending on a variety of important factors, including, among others, the impact of competitive products, pricing and new technology; changes in demand for the Company's products; changes in consumer preferences and tastes; and effectiveness of marketing; changes in laws and regulations; fluctuations in costs of production, delays and cost overruns related to developing and opening new production facilities; and other factors as those discussed in the Company's reports filed with the Securities and Exchange Commission from time to time.

    For further information, please contact:

     Jie Li
     Chief Financial Officer
     China Automotive Systems
     Email: jieli@chl.com.cn

     Kevin Theiss
     Investor Relations
     Grayling
     Tel:   +1-646-284-9409
     Email: kevin.theiss@us.grayling.com

WUHAN, China, Nov. 12 /PRNewswire-Asia-FirstCall/ -- China Automotive Systems, Inc., (the "Company"), (Nasdaq: CAAS - News), a leading power steering components and systems supplier in China, today announced record financial results for the third quarter and nine months ended September 30, 2009.

    2009 Third Quarter Highlights:

    -- Net sales increased organically 75% YoY to a new quarterly sales record
       of $64.7 million;
    -- Net income rose 210.2% YoY to a quarterly record $8.6 million;
    -- Diluted EPS were a quarterly record $0.28 versus $0.09 in the third
       quarter of 2008;
    -- Net cash flow from operations was $24.3 million for the nine months;
    -- Cash and equivalents were $45.9 million at September 30, 2009.

Net sales for the third quarter of 2009 represented a 75.0% year-over-year increase to $64.7 million, the highest quarterly sales in the Company's history versus $36.9 million in the 2008 third quarter.

Sales of steering gears for passenger vehicles in the 2009 third quarter were $43.8 million, reflecting a 77.8% increase from $24.6 million in the same quarter one year ago. Pump sales for domestic passenger vehicles in the 2009 third quarter were $6.2 million, an increase of 79.2% from $3.4 million in the same quarter last year. Commercial vehicle steering gear and accessories sales were $14.6 million, representing an increase of 66.0% compared with $8.8 million for the same period of 2008.

Gross profit in the third quarter of 2009 was $17.6 million, an increase of $7.7 million compared with $9.9 million for the same quarter in 2008, reflecting a 78.6% year-over-year increase. The gross margin in the third quarter of 2009 was 27.3%, compared with 26.7% in the third quarter last year. The Company plans to meet its yearly gross margin target of at least 28%.

Selling expenses in the third quarter were $4.3 million as compared to $2.3 million in the same quarter a year ago. Selling expenses as a percentage of revenue for the third quarter of 2009 were 6.7% as compared to 6.3% for the same period in 2008.

General and administrative expenses in the third quarter were $2.7 million as compared to $2.1 million in the same quarter a year ago. G&A as a percentage of revenue for the third quarter of 2009 were 4.2% as compared to 5.6% for the same period in 2008.

Operating income increased by 161.1% year-over-year to $9.7 million in the third quarter of 2009, compared with $3.7 million in the same quarter in 2008. Higher gross profit combined with lower third quarter operating expenses in 2009 generated higher operating income compared with the same quarter last year.

Net income attributable to common shareholders was $8.6 million for the third quarter, or $0.28 per diluted share, compared with $2.8 million, or $0.09 per diluted share in the same quarter in 2008. The net margin for net income attributable to common shareholders rose to 13.2% in the 2009 third quarter from 7.5% in the third quarter of 2008. The diluted weighted average shares outstanding were 31.4 million in the third quarters of both 2009 and 2008.

As of September 30, 2009, total cash and cash equivalents were $45.9 million, as compared with $37.1 million as of December 31, 2008. Stockholder's equity increased to $123.7 million as of September 30, 2009 from $104.5 million as of December 31, 2008. Working capital reached $87.5 million. Net cash flow from operations was $24.3 million for the nine months ended September 30, 2009. During the third quarter of 2009, CAPEX was $2.5 million and free cash flow increased by $6.1 million as the Company purchased equipment to enhance its production capacity. As a result, total free cash flow was $15.5 million in the first nine months in 2009.

2009 Outlook

The Company expects its revenue to increase by approximately 40% for the year 2009. This target is based on the Company's current contracts from existing customers, which are subject to change.

Conference Call

Management will conduct a conference call on Thursday, November 12 at 8:00 a.m. Eastern Standard Time to discuss these results. A question and answer session will follow management's presentation.

To participate, please call the following numbers 10 minutes before the call start time and ask to be connected to the "China Automotive Systems" conference call:

Phone Number: +1-877-407-9205 (North America)

Phone Number: +1-201-689-8054 (International)

In addition, the conference call will be broadcast live over the Internet at: http://www.caasauto.com

Please go to the web site at least 15 minutes early to register, download and install any necessary software.

A telephone replay of the call will be available after the conclusion of the conference call through 11:59 PM Eastern Standard Time on Thursday, November 26, 2009. The dial-in details for the replay are: U.S. Toll Free Number +1-877-660-6853, International dial-in number +1-201-612-7415; using Account "286" and Conference ID "337003" to access the replay. The internet audio stream will also be available until 11:59 pm Eastern Standard Time on Thursday, November 26.

About China Automotive Systems, Inc.

Based in Hubei Province, People's Republic of China, China Automotive Systems, Inc. is a leading supplier of power steering components and systems to the Chinese automotive industry, operating through eight Sino-foreign joint ventures. The Company offers a full range of steering system parts for passenger automobiles and commercial vehicles. The Company currently offers 4 separate series of power steering with an annual production capacity of over 1.8 million sets, steering columns, steering oil pumps and steering hoses. Its customer base is comprised of leading Chinese auto manufacturers such as China FAW Group, Corp., Dongfeng Auto Group Co., Ltd., BYD Auto Company Limited, Beiqi Foton Motor Co., Ltd. and Chery Automobile Co., Ltd., etc. For more information, please visit: http://www.caasauto.com

Safe Harbor Statement

This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations or beliefs, including, but not limited to, statements concerning the Company's operations, financial performance and, condition and the impact of acquisitions on its financial performance. For this purpose, statements that are not statements of historical fact may be deemed to be forward-looking statements. The Company cautions that these statements by their nature involve risks and uncertainties, and actual results may differ materially depending on a variety of important factors, including, among others, the impact of competitive products, pricing and new technology; changes in demand for the Company's products; changes in consumer preferences and tastes; and effectiveness of marketing; changes in laws and regulations; fluctuations in costs of production, delays and cost overruns related to developing and opening new production facilities; and other factors as those discussed in the Company's reports filed with the Securities and Exchange Commission from time to time.

For further information, please contact: Jie Li Chief Financial Officer China Automotive Systems Email: jieli@chl.com.cn Kevin Theiss Investor Relations Grayling Tel: +1-646-284-9409 Email: kevin.theiss@us.grayling.com China Automotive Systems, Inc. Condensed Consolidated Statements of Operations (Unaudited) Three Months Ended September 30, 2009 2008 Net product sales, including $1,384,458 and $967,591 to related parties for the three months ended September 30, 2009 and 2008 $64,654,369 $36,936,755 Cost of product sold, including $3,477,109 and $1,783,822 purchased from related parties for the three months ended September 30, 2009 and 2008 47,015,047 27,058,532 Gross profit 17,639,322 9,878,223 Add: Gain on other sales 284,234 343,326 Less: Operating expenses- Selling expenses 4,334,443 2,309,064 General and administrative expenses 2,739,886 2,060,675 R&D expenses 531,383 665,552 Depreciation and amortization 663,408 1,488,842 Total Operating expenses 8,269,120 6,524,133 Income from operations 9,654,436 3,697,416 Add: Other income, net -- 123,167 Financial income (expenses) net (401,121) (446,261) Gain on change in fair value of derivative 3,129,794 677,417 Income before income taxes 12,383,109 4,051,739 Less: Income taxes 1,789,836 309,480 Net income $10,593,273 $3,742,259 Net income attributable to noncontrolling interests 2,036,762 983,480 Net income attributable to common shareholders $8,556,511 $2,758,779 Net income per common share- Basic $0.32 $0.10 Diluted $0.28 $0.09 Weighted average number of common shares outstanding - Basic 26,983,717 26,983,244 Diluted 31,412,485 31,431,026 Nine Months Ended September 30, 2009 2008 Net product sales, including $3,257,716 and $3,766,078 to related parties for the nine months ended September 30, 2009 and 2008 $171,836,094 $124,912,138 Cost of product sold, including $8,463,331 and $6,387,212 purchased from related parties for the nine months ended September 30, 2009 and 2008 123,497,209 88,358,541 Gross profit 48,338,885 36,553,597 Add: Gain on other sales 523,860 595,226 Less: Operating expenses- Selling expenses 10,509,910 7,721,240 General and administrative expenses 6,787,918 7,828,458 R&D expenses 1,415,531 1,404,525 Depreciation and amortization 1,742,162 4,234,633 Total Operating expenses 20,455,521 21,188,856 Income from operations 28,407,224 15,959,967 Add: Other income, net -- 322,626 Financial income (expenses) net (1,318,829) (884,708) Gain on change in fair value of derivative 591,511 1,672,570 Income before income taxes 27,679,906 17,070,455 Less: Income taxes 4,714,124 718,417 Net income $22,965,782 $16,352,038 Net income attributable to noncontrolling interests 6,074,110 4,418,730 Net income attributable to common shareholders $16,891,672 $11,933,308 Net income per common share- Basic $0.63 $0.47 Diluted $0.58 $0.45 Weighted average number of common shares outstanding - Basic 26,983,402 25,272,884 Diluted 31,627,696 28,734,809 China Automotive Systems, Inc. Condensed Consolidated Balance Sheets September 30, December 31, 2009 2008 (Unaudited) ASSETS Current assets: Cash and cash equivalents $45,894,475 $37,113,375 Pledged cash deposits 9,252,284 6,739,980 Accounts and notes receivable, net, including $2,940,878 and $1,285,110 from related parties at September 30, 2009 and December 31, 2008 131,518,363 96,424,856 Advance payments and other, including $256,880 and $9,374 to related parties at September 30, 2009 and December 31, 2008 2,038,161 1,442,614 Inventories 29,388,926 26,571,755 Total current assets $218,092,209 $168,292,580 Long-term Assets: Property, plant and equipment, net $58,226,765 $51,978,905 Intangible assets, net 673,054 504,339 Other receivables, net, including $869,318 and $903,674 from related parties at September 30, 2009 and December 31, 2008 1,214,876 1,349,527 Advance payments for property, plant and equipment, including $2,739,564 and $2,473,320 to related parties at September 30, 2009 and December 31, 2008 2,826,235 6,459,510 Long-term investments 79,075 79,010 Deferred income tax assets 2,916,305 2,383,065 Total assets $284,028,519 $231,046,936 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Bank loans $9,518,231 $7,315,717 Accounts and notes payable, including $1,849,590 and $1,097,642 to related parties at September 30, 2009 and December 31, 2008 89,332,480 59,246,043 Convertible notes payable -- 32,922,077 Derivative liabilities -- 1,502,597 Customer deposits 552,519 236,018 Accrued payroll and related costs 3,064,192 2,715,116 Accrued expenses and other payables 14,971,228 12,460,784 Accrued pension costs 3,863,194 3,806,519 Taxes payable 9,254,273 5,717,438 Amounts due to shareholders/directors 50,034 337,370 Total current liabilities $130,606,151 $126,259,679 Long-term liabilities: Convertible notes payable 28,534,712 -- Derivative liabilities 913,063 -- Advances payable 233,914 234,041 Total liabilities $160,287,840 $126,493,720 Related Party Transactions and balances Commitments and contingencies Stockholders' equity: Preferred stock, $0.0001 par value - Authorized - 20,000,000 shares Issued and outstanding - None $-- $-- Common stock, $0.0001 par value - Authorized - 80,000,000 Shares Issued and Outstanding - 26,984,744 shares at September 30, 2009 and 26,983,244 shares at December 31, 2008 2,698 2,698 Additional paid-in capital 27,353,646 27,148,206 Retained earnings- Appropriated 8,324,533 7,525,777 Unappropriated 52,119,432 36,026,516 Deferred stock compensation (375,039) (500,052) Accumulated other comprehensive income 10,943,960 11,127,505 Non-controlling interests 25,371,449 23,222,566 Total stockholders' equity $123,740,679 $104,553,216 Total liabilities and stockholders' equity $284,028,519 $231,046,936 China Automotive Systems, Inc. Condensed Consolidated Statements of Cash Flows (Unaudited) Nine Months Ended September 30, 2009 2008 Cash flows from operating activities: Net income $22,965,782 $16,352,038 Adjustments to reconcile net income from continuing operations to net cash provided by operating activities: Stock-based compensation 321,663 95,400 Depreciation and amortization 5,940,068 7,320,365 Allowance for doubtful accounts (Recovered) (1,484,680) 70,303 Deferred income taxes assets (531,244) (582,746) Amortization for discount of convertible note payable 612,635 302,771 (Gain) loss on change in fair value of derivative (591,511) (1,672,570) Other operating adjustments (226,916) (11,054) Changes in operating assets and liabilities: (Increase) decrease in: Pledged deposits (2,505,479) (4,188,067) Accounts and notes receivable (33,727,451) (12,353,480) Advance payments and other (593,563) (703,006) Inventories (2,794,500) (8,253,097) Accounts and notes payable 30,025,373 8,678,459 Customer deposits 316,133 19,248 Accrued payroll and related costs 346,723 29,914 Accrued expenses and other payables 2,685,922 1,049,671 Accrued pension costs 53,613 (126,889) Taxes payable 3,528,700 (1,536,750) Advances payable (317) (126,834) Net cash provided by operating activities $24,340,951 $4,363,676 Cash flows from investing activities: (Increase) decrease in other receivables 125,815 (385,893) Cash received from equipment sales 678,132 143,672 Cash paid to acquire property, plant and equipment (8,814,876) (9,463,155) Cash paid to acquire intangible assets (321,671) (117,064) Cash paid for the acquisition of 35.5% of Henglong -- (10,000,000) Net cash (used in) investing activities $(8,332,600) $(19,822,440) Cash flows from financing activities: Proceeds from (repayment of) bank loans 2,197,177 (9,030,840) Dividends paid to the non-controlling interest holders of Joint-venture companies (4,176,583) (5,159,657) (Decrease) in amounts due to shareholders/directors (287,854) (78,857) Proceeds on exercise of stock options 8,790 -- Capital contribution from the non-controlling interest holders of Joint-venture companies -- 745,723 Proceeds on issuance of convertible note payable -- 35,000,000 Repayment of convertible note payable (5,000,000) -- Net cash provided by (used in) financing activities $(7,258,470) $21,476,369 Cash and cash equivalents effected by foreign currency $31,219 $1,683,815 Net increase in cash and cash equivalents 8,781,100 7,701,420 Cash and cash equivalents at beginning of period 37,113,375 19,487,159 Cash and cash equivalents at end of period $45,894,475 $27,188,579

To participate, please call the following numbers 10 minutes before the call start time and ask to be connected to the "China Automotive Systems" conference call:

Phone Number: +1-877-407-9205 (North America)

Phone Number: +1-201-689-8054 (International)

In addition, the conference call will be broadcast live over the Internet at: http://www.caasauto.com

Please go to the web site at least 15 minutes early to register, download and install any necessary software.

A telephone replay of the call will be available after the conclusion of the conference call through 11:59 PM Eastern Standard Time on Thursday, November 26, 2009. The dial-in details for the replay are: U.S. Toll Free Number +1-877-660-6853, International dial-in number +1-201-612-7415; using Account "286" and Conference ID "337003" to access the replay. The internet audio stream will also be available until 11:59 pm Eastern Standard Time on Thursday, November 26.

About China Automotive Systems, Inc.

Based in Hubei Province, People's Republic of China, China Automotive Systems, Inc. is a leading supplier of power steering components and systems to the Chinese automotive industry, operating through eight Sino-foreign joint ventures. The Company offers a full range of steering system parts for passenger automobiles and commercial vehicles. The Company currently offers 4 separate series of power steering with an annual production capacity of over 1.8 million sets, steering columns, steering oil pumps and steering hoses. Its customer base is comprised of leading Chinese auto manufacturers such as China FAW Group, Corp., Dongfeng Auto Group Co., Ltd., BYD Auto Company Limited, Beiqi Foton Motor Co., Ltd. and Chery Automobile Co., Ltd., etc. For more information, please visit: http://www.caasauto.com

Safe Harbor Statement

This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations or beliefs, including, but not limited to, statements concerning the Company's operations, financial performance and, condition and the impact of acquisitions on its financial performance. For this purpose, statements that are not statements of historical fact may be deemed to be forward-looking statements. The Company cautions that these statements by their nature involve risks and uncertainties, and actual results may differ materially depending on a variety of important factors, including, among others, the impact of competitive products, pricing and new technology; changes in demand for the Company's products; changes in consumer preferences and tastes; and effectiveness of marketing; changes in laws and regulations; fluctuations in costs of production, delays and cost overruns related to developing and opening new production facilities; and other factors as those discussed in the Company's reports filed with the Securities and Exchange Commission from time to time.

    For further information, please contact:

     Jie Li
     Chief Financial Officer
     China Automotive Systems
     Email: jieli@chl.com.cn

     Kevin Theiss
     Investor Relations
     Grayling
     Tel:   +1-646-284-9409
     Email: kevin.theiss@us.grayling.com

        Additional details of the Company's presentation are:

        Date: October 14, 2009
        Time: 10:30 AM - 11:00 AM
        Venue: Glimmer 4 room

About China Automotive Systems, Inc.

Based in Hubei Province, People's Republic of China, China Automotive Systems, Inc. is a leading supplier of power steering components and systems to the Chinese automotive industry, operating through eight Sino-foreign joint ventures. The Company offers a full range of steering system parts for passenger automobiles and commercial vehicles. The Company currently offers 4 separate series of power steering with an annual production capacity of over 1.8 million sets, steering columns, steering oil pumps and steering hoses. Its customer base is comprised of leading Chinese auto manufacturers such as China FAW Group, Corp., Dongfeng Auto Group Co., Ltd., BYD Auto Company Limited , Beiqi Foton Motor Co., Ltd. and Chery Automobile Co., Ltd., etc. For more information, please visit: http://www.caasauto.com

For further information, please contact: Jie Li Chief Financial Officer China Automotive Systems Email: jieli@chl.com.cn Kevin Theiss Investor Relations Grayling Tel: +1-646-284-9409 Email: kevin.theiss@us.grayling.com

Additional details of the Company's presentation at the conference are as follows:

    Date: Thursday, September 10, 2009
    Time: 11:40 AM - 12:05 PM Eastern Time
    Venue: Kennedy I Salon (4th Floor)

About China Automotive Systems, Inc.

Based in Hubei Province, People's Republic of China, China Automotive Systems, Inc. is a leading supplier of power steering components and systems to the Chinese automotive industry, operating through eight Sino-foreign joint ventures. The Company offers a full range of steering system parts for passenger automobiles and commercial vehicles. The Company currently offers 4 separate series of power steering with an annual production capacity of over 1.8 million sets, steering columns, steering oil pumps and steering hoses. Its customer base is comprised of leading Chinese auto manufacturers such as China FAW Group, Corp., Dongfeng Auto Group Co., Ltd., BYD Auto Company Limited , Beiqi Foton Motor Co., Ltd. and Chery Automobile Co., Ltd., etc. For more information, please visit: http://www.caasauto.com

    For further information, please contact:

     Jie Li
     Chief Financial Officer
     China Automotive Systems
     Email: jieli@chl.com.cn

     Kevin Theiss
     Investor Relations
     Grayling
     Tel:   +1-646-284-9409
     Email: kevin.theiss@us.grayling.com

    -- First quarter 2009 net sales increased 7.8% year-over-year to $44.7
       million;
    -- Net sales from steering components for passenger and light-duty
       vehicles increased 10.9% to $29.3 million; Net sales from steering
       components for commercial vehicles decreased to $9.7 million from $11.3
       million;
    -- Income from operations was $7.1 million for the 2009 first quarter
       compared with $6.8 million in the 2008 first quarter;
    -- 2009 first quarter non-GAAP diluted EPS was $0.13 versus $0.18 in the
       2008 first quarter, on 23.2% greater number of diluted shares
       outstanding in the 2009 first quarter;
    -- 2009 first quarter diluted EPS was $0.08 versus $0.18 in the 2008 first
       quarter, on 23.2% greater number of diluted shares outstanding in the
       2009 first quarter;
    -- 2009 first quarter net cash flow from operations was $8.9 million
       compared with negative cash flow in the first quarter of 2008.

Mr. Qizhou Wu, Chief Executive Officer of the Company, commented, "China has continued to grow despite the global economic recession, and in January 2009, China became the largest automotive market in the world. First quarter vehicle sales were up almost 4% to over 2.6 million vehicles. This growth is in sharp contrast to other markets which continue to report deep declines in vehicle sales. To boost economic growth in China, the Chinese Government implemented a number of stimulus packages for the automotive and agricultural industries in the first quarter of 2009. Demand began to pick up for vehicles during the 2009 first quarter, and especially for smaller passenger vehicles affected by the reduction in sales tax and the Chinese Government's vehicle subsidy for the rural markets."

Total net sales for the first quarter of 2009 increased 7.8% to $44.7 million compared with $41.5 million in the first quarter of 2008, and compared with $38.3 million for the fourth quarter of 2008.

First quarter net sales for 2009 from steering products for passenger and light-duty vehicles increased by 10.9% year-over-year to $29.3 million compared with $26.4 million in the same quarter of 2008. Net sales from steering products for commercial vehicles for the first quarter of 2009 decreased 13.4% to $9.8 million year-over-year from the $11.3 million reported in the same quarter in 2008. Net sales from oil pumps and sensors for the 2009 first quarter increased 45.6% to $5.4 million from $3.7 million in the year ago quarter.

Gross profit for the first quarter of 2009 was $12.2 million compared with $12.2 million in the same quarter last year, and compared with $10.7 million in the fourth quarter of 2008. The gross margin was 27.3% for the three months ended March 31, 2009, a decrease of 2.2% from 29.5% in the similar period last year. The decline of the gross margin was mainly due to the higher sales volumes of lower-priced products.

Income from operations in the 2009 first quarter was $7.1 million compared with $6.8 million in the same quarter in 2008, and compared with $964,000 in the fourth quarter of 2008.

Pro forma net income was $4.2 million compared with $4.7 million in the first quarter of 2008. Pro forma diluted EPS was $0.13 in the first quarter of 2009 compared with $0.18 in the similar quarter in 2008, based on a 23.2% greater number of diluted shares outstanding in the 2009 quarter.

Net income for the 2009 first quarter was $2.3 million, or $0.08 per diluted share versus $4.4 million, or $ 0.18 per diluted share in the previous year's first quarter, based on a 23.2% greater number of diluted shares outstanding in the 2009 quarter.

    Summary of Financial Results
    (US dollars except shares outstanding)         For the Three Months
                                                      Ended March 31,
                                                    2009            2008

    Net income attributable to common
     shareholders                                 $2,258,812      $4,430,174

    Amortization related to convertible note
     discount                                        122,347          99,449

     Interest expenses of convertible note           284,375         131,250

     Loss on change in fair value of
      derivative                                   1,560,848              --

    Pro forma Net Income                           4,226,382       4,660,873


       Adjustment to diluted EPS                        0.05              --

    Pro forma diluted EPS                              $0.13           $0.18

    Diluted avg. number of common shares          31,947,823      25,936,500

Total cash and cash equivalents as of March 31, 2009 were $37.6 million compared with $37.1 million at December 31, 2008. Accounts receivable were $103.7 million at the end of the quarter. Through a strong cash management program, net cash flow from operations during the 2009 first quarter was $8.9 million compared with negative cash flow from operations for the first quarter last year. Stockholder's equity increased to $106.7 million.

Key Accomplishments in 2009 First Quarter:

On March 16, 2009, the Company announced that officials from the Hubei Provincial Government and the Hubei Provincial Ministry of Technology visited the Company's wholly owned subsidiary, Jingzhou Hengsheng Automotive System Co., Ltd., "Hengsheng". This subsidiary produces high-end products mainly focused to meet the stringent quality demands of Chinese joint ventures and the global export market. Equipped with state-of-the-art machine tools, assembly lines, and testing equipment in a 200,000 square meter facility, Hengsheng has a designed annual production capacity of 1.3 million units. As a wholly owned foreign enterprise, Hengsheng benefits from an income tax exemption through 2010 followed by preferential tax treatment (at a 15% rate) for the following 3 years thereafter.

On March 11, 2009, the Company announced that Shashi Jiulong Power Steering Gears Co., Ltd., "Jiulong", CAAS' subsidiary specializing in producing power steering systems for commercial vehicles in China, recovered its production to normal levels in February 2009 and expected to produce 45,000 units of power steering in March 2009, a new record for monthly production, in response to new orders.

On March 5, 2009 the Company announced that its subsidiary, Jingzhou Henglong Automotive Parts Co., Ltd., "Henglong", planned to have record monthly production of 85,000 power steering units for passenger vehicles in March 2009, and subsidiary Zhejiang Henglong & Vie Pump-Manufacturing Co. Limited, "WanAn", matched its record daily production rate of 1,600 units following the Chinese New Year in response to a large number of new orders.

On February 17, 2009, the Company announced that its subsidiary, Wuhu HengLong Automotive Steering System Co., Ltd., "Wuhu", won two awards from China's leading independent domestic auto maker, Chery Automobile Co., Ltd., "Chery Auto". Chery Auto hosted over 500 domestic and foreign suppliers and Chery Auto honored Wuhu as the "Best Core Supplier" and the "Best Auto Component Supplier" at the ceremony. The Company supplied approximately 75% of the power steering units used by Chery Auto in 2008. Sales to Chery Auto represented approximately 16% of the Company's total revenues.

On January 26, 2009, the Company announced that the ERP system of its subsidiary and joint venture with Chery Auto, Wuhu, has been recognized as one of the key science and technology projects in Wuhu City. As one of the best ERP systems, Wuhu received a technology grant from the local government.

On January 12, 2009, the Company announced that it was recognized as one of the 100 "Best Enterprises" and Mr. Hanlin Chen was named as one of the 10 "Best Entrepreneurs" by Jinzhou City.

Recent Developments

On April 14, 2009, the Company announced that the R&D center of Henglong had evolved into the leading automotive steering technology research operation in China, as the Company enters the global steering market. Since 2006, the R&D center developed 28 power steering-related national patents including 2 invention and 26 utility model patents. New products have been manufactured by the Company for more than 20 domestic and foreign automotive OEMs, and sales totaled over RMB 847 million by the end of 2008. Among new steering being developed are: low-noise power steering technology, stabilizing power steering valves, electric power steering (EPS), electronically controlled hydraulic power steering (EHPS), and other innovative technologies. The R&D center also develops proprietary manufacturing equipment and processes.

On April 7, 2009, the Company's subsidiaries, Henglong and Jiulong, were recognized as High-Tech Enterprises by the Chinese Government, which qualified the two subsidiaries for a preferential income tax rate of 15% through 2011. Henglong and Jiulong were the two largest contributors to revenues and together, provided over $12 million of net income in 2008.

2009 Outlook

Based on current operating and market expectations, management anticipates that revenue growth will be between 10-15% for the 2009 year. These current expectations are subject to change at any time.

Mr. Hanlin Chen, Chairman of the Company said, "We believe that the stimulus will continue to generate growth in the Chinese market and it has been reported that the Chinese Association of Automobile Manufacturers (CAAM) has increased its growth outlook for vehicle sales from 5% to 8.7% for the 2009 year. Many of our key customers such as Chery Auto, Geely and in particular BYD and ChangAn, are benefiting from the high demand for small, fuel-efficient cars in the tier 2 to tier 4 cities and townships. On the commercial vehicle side, in late March, we saw healthy recovery as the large- scale government stimulus efforts have boosted continued infrastructure construction. Also, truck sales started to revive, as National 3 engine products are gradually coming into the marketplace. In response to the turning market, we have leveraged our excellent R&D capabilities to quickly introduce more new products to address the needs of the latest vehicle models and automotive technologies entering into the marketplace. We remain cautiously optimistic for the short term. Our long-term goals remain to maintain market leadership and strengthen our relationships with OEMs."

Conference Call

Management will conduct a conference call today at 8:00 a.m. Eastern Daylight Time to discuss these results. A question and answer session will follow management's presentation. To participate, please call the following numbers 10 minutes before the call start time and ask to be connected to the "China Automotive Systems" conference call:

Phone Number: +1-877-407-9205 (North America)

Phone Number: +1-201-689-8054 (International)

In addition, the conference call will be broadcast live over the Internet at: http://www.caasauto.com

Please go to the web site at least 15 minutes early to register, download and install any necessary software.

A telephone replay of the call will be available after the conclusion of the conference call through 11:59 PM Eastern Daylight Time on Tuesday, May 26, 2009. The dial-in details for the replay are: U.S. Toll Free Number +1-877-660-6853, International dial-in number +1-201-612-7415; using Account "286" and Conference ID "322107" to access the replay. The internet audio stream will also be available until 11:59 pm Eastern Daylight Time on Tuesday, May 26.

About China Automotive Systems, Inc.

Based in Hubei Province, People's Republic of China, China Automotive Systems, Inc. is a leading supplier of power steering components and systems to the Chinese automotive industry, operating through eight Sino-foreign joint ventures. The Company offers a full range of steering system parts for passenger automobiles and commercial vehicles. The Company currently offers 4 separate series of power steering and 307 models of power steering with an annual production capacity of over 1.5 million sets, steering columns, steering oil pumps and steering hoses. Its customer base is comprised of leading Chinese auto manufacturers such as China FAW Group, Corp., Dongfeng Auto Group Co., Ltd., Brilliance China Automotive Holdings Ltd., Beiqi Foton Motor Co., Ltd. and Chery Automobile Co., Ltd., etc. For more information, please visit: http://www.caasauto.com

Safe Harbor Statement

This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward- looking statements are based on current expectations or beliefs, including, but not limited to, statements concerning the Company's operations, financial performance and condition, and the impact of acquisitions on its financial performance. For this purpose, statements that are not statements of historical fact may be deemed to be forward-looking statements. The Company cautions that these statements by their nature involve risks and uncertainties, and actual results may differ materially depending on a variety of important factors, including, among others, the impact of competitive products, pricing and new technology; changes in demand for the Company's products; changes in consumer preferences and tastes; and effectiveness of marketing; changes in laws and regulations; fluctuations in costs of production, delays and cost overruns related to developing and opening new production facilities; the continued growth of the Chinese economy and the domestic automotive industry, and other factors as those discussed in the Company's reports filed with the Securities and Exchange Commission from time to time.

    For further information, please contact:

     Jie Li
     Chief Financial Officer
     China Automotive Systems
     Email: jieli@chl.com.cn

     Kevin Theiss
     Investor Relations
     Grayling
     Tel:   +1-646-284-9409
     Email: ktheiss@hfgcg.com

China Automotive Systems To Announce 2009 First Quarter Financial Results on May 12

WUHAN, China, May 4 /PRNewswire-Asia/ -- China Automotive Systems, Inc. (Nasdaq: CAAS), a leading power steering components and systems supplier in China, today announced that it will issue financial results for the first quarter ended March 31, 2009 on Tuesday, May 12, 2009 before the stock market opens. Management will conduct a conference call on Tuesday, May 12 at 8:00 a.m. Eastern Daylight Time to discuss these results. A question and answer session will follow management's presentation. To participate, please call the following numbers 10 minutes before the call start time and ask to be connected to the "China Automotive Systems" conference call:

Phone Number: +1-877-407-9205 (North America)

Phone Number: +1-201-689-8054 (International)

In addition, the conference call will be broadcast live over the Internet at: http://www.caasauto.com

Please go to the web site at least 15 minutes early to register, download and install any necessary software.

A telephone replay of the call will be available after the conclusion of the conference call through 11:59 PM Eastern Daylight Time on Tuesday, May 26, 2009. The dial-in details for the replay are: U.S. Toll Free Number +1-877-660-6853, International dial-in number +1-201-612-7415; using Account "286" and Conference ID "322107" to access the replay. The internet audio stream will also be available until 11:59 pm Eastern Daylight Time on Tuesday, May 26.

About China Automotive Systems

Based in Hubei Province, People's Republic of China, China Automotive Systems, Inc. is a leading supplier of power steering components and systems to the Chinese automotive industry, operating through seven Sino-foreign joint ventures. The Company offers a full range of steering system parts for passenger automobiles and commercial vehicles. The Company currently offers 4 separate series of power steering and 307 models of power steering with an annual production capacity of over 1.3 million sets, steering columns, steering oil pumps and steering hoses. Its customer base is comprised of leading Chinese auto manufacturers such as China FAW Group, Corp., Dongfeng Auto Group Co., Ltd., Brilliance China Automotive Holdings Ltd., Beiqi Foton Motor Co., Ltd. and Chery Automobile Co., Ltd., etc. For more information, please visit: http://www.caasauto.com

Safe Harbor Statement

This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations or beliefs, including, but not limited to, statements concerning the Company's operations, financial performance and condition, and the impact of acquisitions on its financial performance. For this purpose, statements that are not statements of historical fact may be deemed to be forward-looking statements. The Company cautions that these statements by their nature involve risks and uncertainties, and actual results may differ materially depending on a variety of important factors, including, among others, the impact of competitive products, pricing and new technology; changes in demand for the Company's products; changes in consumer preferences and tastes; and effectiveness of marketing; changes in laws and regulations; fluctuations in costs of production, delays and cost overruns related to developing and opening new production facilities; and other factors as those discussed in the Company's reports filed with the Securities and Exchange Commission from time to time.

    For further information, please contact:

     Jie Li
     Chief Financial Officer
     China Automotive Systems
     Email: jieli@chl.com.cn

     Kevin Theiss
     Investor Relations
     Grayling
     Tel:   +1-646-284-9409
     Email: ktheiss@hfgcg.com

After only three years in operation, the R&D center has 28 power steering-related national patents including 2 invention patents and 26 utility model patents, covering products, processes, equipment and other innovations. It has a focus on market-oriented solutions and applications. The new products it developed have been manufactured through CAAS's subsidiaries for more than 20 domestic and foreign automotive OEMs, and produced cumulative sales in excess of RMB 847 million by the end of 2008.

Among the new steering technologies the center is currently independently developing are: low-noise power steering technology, stabilizing power steering valves, electric power steering (EPS), electronically controlled hydraulic power steering (EHPS), and other innovative technologies. In addition to new products, the R&D center develops proprietary manufacturing equipment and processes for the efficient production of its steering units.

Mr. Qizhou Wu, China Automotive Systems' CEO, commented, "Henglong's R&D center is making great strides to take us to the next level of technological innovation to position us to successfully compete globally. New technology to develop advanced products to meet the needs of both our current and potential customers will generate opportunities for us to capture market share. As automotive technology continues to change, we will be there with a solution for our customers. This R&D expertise will provide a growing competitive advantage, especially among domestic Chinese competitors, in the world's largest automotive market."

The Hubei Provincial Science & Technology Department recently reviewed the R&D center's operations and progress. The government's officers were deeply impressed by the R&D center's state-of-the-art test equipment and facilities, experienced experts and the full financial support provided by China Automotive Systems. The officials were firmly convinced that the center will further evolve into a leading global automotive steering technology research operation.

About China Automotive Systems

Based in Hubei Province, People's Republic of China, China Automotive Systems, Inc. is a leading supplier of power steering components and systems to the Chinese automotive industry, operating through seven Sino-foreign joint ventures. The Company offers a full range of steering system parts for passenger automobiles and commercial vehicles. The Company currently offers 4 separate series of power steering and 307 models of power steering with an annual production capacity of over 1.3 million sets, steering columns, steering oil pumps and steering hoses. Its customer base is comprised of leading Chinese auto manufacturers such as China FAW Group, Corp., Dongfeng Auto Group Co., Ltd., Brilliance China Automotive Holdings Ltd., Beiqi Foton Motor Co., Ltd. and Chery Automobile Co., Ltd., etc. For more information, please visit: http://www.caasauto.com

Safe Harbor Statement

This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations or beliefs, including, but not limited to, statements concerning the Company's operations, financial performance and condition, and the impact of acquisitions on its financial performance. For this purpose, statements that are not statements of historical fact may be deemed to be forward-looking statements. The Company cautions that these statements by their nature involve risks and uncertainties, and actual results may differ materially depending on a variety of important factors, including, among others, the impact of competitive products, pricing and new technology; changes in demand for the Company's products; changes in consumer preferences and tastes; and effectiveness of marketing; changes in laws and regulations; fluctuations in costs of production, delays and cost overruns related to developing and opening new production facilities; and other factors as those discussed in the Company's reports filed with the Securities and Exchange Commission from time to time.

    For further information, please contact:

     Jie Li
     Chief Financial Officer
     China Automotive Systems
     Email: jieli@chl.com.cn

     Kevin Theiss
     Investor Relations
     Grayling
     Tel:   +1-646-284-9409
     Email: kevin.theiss@us.grayling.com

These two subsidiaries were found to meet the criteria to qualify as High-Tech Enterprises based on "enterprise income tax law" and "high-tech enterprise management practice".

For the 2008 year, Henglong and Jiulong were the two largest contributors to revenues and combined these subsidiaries provided over $12 million of net income.

About CAAS

Based in Hubei Province, People's Republic of China, China Automotive Systems, Inc. is a leading supplier of power steering components and systems to the Chinese automotive industry, operating through seven Sino-foreign joint ventures. The Company offers a full range of steering system parts for passenger automobiles and commercial vehicles. The Company currently offers 4 separate series of power steering and 307 models of power steering with an annual production capacity of over 1.3 million sets, steering columns, steering oil pumps and steering hoses. Its customer base is comprised of leading Chinese auto manufacturers such as China FAW Group, Corp., Dongfeng Auto Group Co., Ltd., Brilliance China Automotive Holdings Ltd., Beiqi Foton Motor Co., Ltd. and Chery Automobile Co., Ltd., etc. For more information, please visit: http://www.caasauto.com

Safe Harbor Statement

This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations or beliefs, including, but not limited to, statements concerning the Company's operations, financial performance and condition, and the impact of acquisitions on its financial performance. For this purpose, statements that are not statements of historical fact may be deemed to be forward-looking statements. The Company cautions that these statements by their nature involve risks and uncertainties, and actual results may differ materially depending on a variety of important factors, including, among others, the impact of competitive products, pricing and new technology; changes in demand for the Company's products; changes in consumer preferences and tastes; and effectiveness of marketing; changes in laws and regulations; fluctuations in costs of production, delays and cost overruns related to developing and opening new production facilities; and other factors as those discussed in the Company's reports filed with the Securities and Exchange Commission from time to time.

    For further information, please contact:

     Jie Li
     Chief Financial Officer
     China Automotive Systems
     Email: jieli@chl.com.cn

     Kevin Theiss
     Investor Relations
     Grayling
     Tel:   +1-646-284-9409
     Email: ktheiss@hfgcg.com

WUHAN, Hubei, China, March 26 /PRNewswire-Asia/ -- China Automotive Systems, Inc., the "Company", (Nasdaq: CAAS - News), a leading power steering components and systems supplier in China, today announced its 2008 fourth quarter and financial results for the year ended December 31, 2008.

    -- Net Sales for 2008 Fourth Quarter were $38.3 million
    -- Net Sales for the 2008 Year were $163.2 Million
    -- Diluted EPS for 2008 Year at $0.46
    -- Sales Growth of 10%-15% Expected in 2009

Mr. Qizhou Wu, Chief Executive Officer of the Company, commented, "The Chinese economy grew approximately 9.0% in 2008, which represents the slowest growth in the last few years as the global economic and financial crisis is also affecting China. The slowing domestic economy reduced the production and sales of automotive vehicles in the latter part of the year, but we still grew faster than the industry in general during 2008."

"As a result of the slowdown, the Chinese Government launched a number of stimulus measures to enhance the economy, including the automotive and agricultural industries. Beginning in late January 2009, vehicle sales began to respond to these incentives. A number of our major customers are positioned to benefit from these measures and we also expect to grow during the rest of 2009."

"Fourth quarter income was temporarily affected by the global economic and financial crisis. However, we maintained a high level of operations to meet customers' orders while we also added production capacity and inventories to accommodate future growth. Going forward, our unit cost and gross margin should benefit from our investment in advanced production equipment and lower material inventory expenses," Mr. Wu concluded.

Fourth Quarter 2008:

Total net sales for the fourth quarter of 2008 were $38.3 million compared with $37.7 million in the same period for 2007, and compared with $36.9 million for the third quarter of 2008.

Gross profit for the fourth quarter of 2008 was $10.7 million compared with $12.7 million in the fourth quarter of 2007, and compared with $9.9 million in the third quarter of 2008. The gross margin in the 2008 fourth quarter was 28%, up from 27% in the third quarter of 2008. The increase of gross margin was mainly due to the decline of raw material costs.

Operating income for the fourth quarter of 2008 was $964,000 compared with $3.5 million in the same quarter in 2007. Higher fourth quarter operating expenses included higher operating expenses compared with the previous year's fourth quarter mainly due to, 1) non-cash amortization related to convertible note discount, 2) stock based compensation, 3) higher bad debt provision, and 4) non-cash loss on change in fair value of derivative related to convertible notes.

Pro forma net income was $2.8 million compared with $1.8 million in the fourth quarter of 2007. Pro forma diluted EPS was $0.09, compared with $0.07 in the fourth quarter of 2007, based on a greater number of diluted shares outstanding.

GAAP net income for the fourth quarter of 2008 was $502,000, or $0.02 versus $2.2 million, or $ 0.09 per diluted share in the previous year's fourth quarter, and compared with $ 2.8 million, or $ 0.09 per diluted share for the third quarter of 2008, based on a greater number of diluted shares outstanding.

    Summary of Financial Results
    (US dollars except shares outstanding)         For the Three Months
                                                    Ended December 31,
                                                   2008             2007

    Total net sales                         $    38,267,148  $    37,698,542

    GAAP Net Income                                 501,933        2,187,233
    Amortization related to convertible
     note discount and Interest expenses
     of convertible note                            384,394               --

    Stock-based compensation                        250,026          153,675
    Allowance for doubtful accounts
     (Recovered)                                    960,435         (563,002)

    Loss on change in fair value of
     derivative                                     674,556               --

    Adjustments to the Net Income                 2,269,411         (409,327)
    Pro forma Net Income                          2,771,344        1,777,906


    GAAP Earnings per share                            0.02             0.09

       Adjustment to diluted EPS                       0.07            (0.02)

    Pro forma diluted EPS                              0.09             0.07

    Diluted avg. number of common shares         31,925,211       23,968,841



    Fiscal Year 2008:
    (in millions except per share
    and percentage, audited)
                                             2008        2007   Growth Rate

    Steering gear for commercial
     vehicles                               $40.5       $35.8      13.1%
    Steering gear for passenger
     vehicles                               107.2        83.9      27.8%
    Other                                    15.5        13.9      10.2%
    Total Net Sales                         163.2       133.6      22.1%
    Net Income                               12.4         8.9      40.4%
    Diluted earnings per share              $0.46       $0.37      19.6%

Total net sales for the year 2008 increased to $163.2 million from $133.6 million in the 2007 year, reflecting a 22.1% year-over-year growth. The Company's sales growth was generated by China's rising economy especially in the first half of 2008, higher income levels leading to higher vehicle sales, and investment in the national economy generating a greater number of commercial vehicle sales in China during 2008.

Gross profit for the year 2008 increased to $47.3 million compared with $45.3 million, in 2007 reflecting a 4.3% increase year-over-year. The gross margin in 2008 was 29% compared with 34% in 2007 primarily due to higher raw material prices. The Company is re-designing products and production techniques to enhance the gross margin as well as increasing prices on some commercial vehicle products.

Operating income for the year 2008 was $16.9 million versus $21.3 million in 2007. Higher operating expenses in 2008 included higher selling, and general and administrative expenses compared with the previous year mainly due to, 1) non-cash amortization related to convertible note discount, 2) stock based compensation, 3) higher bad debt provision, and 4) non-cash gain on change in fair value of derivative related to convertible notes.

Pro forma net income was $14.2 million compared with $8.1 million in fiscal year 2007. Pro forma diluted EPS was $0.48, compared with $0.34 in fiscal year 2007, reflecting 41.2% year-over-year growth. For 2008, the total number of diluted shares outstanding was 29,668,726 as compared with 23,958,705 in 2007.

GAAP net income for the 2008 year was $12.4 million compared with $8.9 million in 2007, reflecting a 40.4% year-over-year growth. Diluted earnings per share for year 2008 were $0.46 versus $0.37 last year, reflecting 24.3% year-over-year growth, on a greater number of diluted shares outstanding.

    Summary of Financial Results
    (US dollars except shares outstanding,
     GAAP numbers audited)
                                              Fiscal Year Ended December 31,
                                                   2008             2007
    Total net sales                        $    163,179,286 $    133,597,003

    GAAP Net Income                              12,435,241        8,859,906
    Interest expenses of convertible notes
     payable
                                                    918,750
    Amortization related to convertible
     note discount                                  424,665               --

    Stock-based compensation                        345,426          153,675

    Allowance for doubtful accounts
     (Recovered)                                  1,030,738         (881,423)

    (Gain) Loss on change in fair value of
     derivative                                    (998,014)              --

    Adjustments to the Net Income                 1,721,565         (727,748)
    Pro forma Net Income                         14,156,806        8,132,158


    GAAP diluted earnings per share                    0.46             0.37

       Adjustment to diluted EPS                       0.02            (0.03)

    Pro forma diluted EPS                              0.48             0.34

    Diluted avg. number of common shares         29,668,726       23,958,705

Total cash and cash equivalents as of December 31, 2008 were $37.1 million compared with $19.5 million at December 31, 2007. Net cash flow from operations during the 2008 year was $16.4 million compared with $11.3 million for the 2007 period. During 2008, the Company invested $10 million to complete the acquisition of Jingzhou Henglong Automotive Parts Co., Ltd., "Henglong", and another $12.2 million in property, plant and equipment to expand and modernize production capacity. Stockholder's equity increased to $81.3 million from $67.2 million as of December 31, 2007.

Key Accomplishments in 2008:

In February 2008, the Company completed a $35 million private placement of senior convertible notes with warrants with two accredited institutional investors.

In April 2008, the Company acquired another 35.5% of Henglong, so its total ownership reached 80%. This new 35.5% ownership of Henglong was immediately accretive to net earnings in 2008. Among Henglong's main customers are some of China's leading automobile manufacturers, such as Chery Auto, Brilliance Auto, BYD Auto, Geely Auto and FAW Volkswagen. The purchase price was approximately $32.1 million.

In July 2008, the Company announced that Dongfeng Peugeot Citroen Automobile Co. Ltd., "DPCA", ordered 3,000 power steering gears per month for the Dongfeng Peugeot 206 automotive model.

In September 2008, the Company announced that Henglong signed an agreement to supply power steering units to ChangAn Auto Co. Ltd., "ChangAn Auto", one of the largest Chinese auto manufacturing groups, for the model CV6.

In October 2008, the Company received orders from DPCA for power steering gears for another model, the Dongfeng Elysee. For the 206 and Elysee models, DPCA switched to only using power steering gears from the Company, replacing imported gears.

In November 2008, the Company announced its first supply contract for power steering gears with a major vehicle manufacturer headquartered in North America. This agreement acknowledges that the Company has met the stringent high-quality requirements of the global markets.

Mr. Hanlin Chen, Chairman of the Company said, "2008 was an eventful year as we consolidated our profit center, acquired a number of new domestic customers, entered into North America's OEM market, and proved we can make products that meet global quality standards. We have more export orders today than at any time in our history and we look forward to receiving additional orders from customers overseas. We also continued to invest in our production capability to become more efficient and meet the growing demand for our products."

Other Event

In October 2008, the Company announced that the Chairman, Mr. Hanlin Chen, the Chief Executive Officer, Mr. Qizhou Wu, Chief Financial Officer, Mr. Jie Li and other officers intended to purchase the Company's stock in the open market. The table below summarizes management's purchases to date.

    Total number of shares      Total amount        Price range
    151,600                     $426,897            $2.07-US$3.57

Recent Developments

In February 2009, the Company announced that it sold approximately 1.3 million systems and components in 2008 compared with 1.1 million in 2007. This increase reflects continued orders from the Company's major historical customers and new customers acquired in 2008.

In March 2009, the Company announced that Henglong planned to set a record monthly production of 85,000 power steering units for passenger vehicles in March 2009, and another subsidiary, Zhejiang Henglong & Vie Pump-Manufacturing Co. Limited, "WanAn", had matched its record daily production rate of 1,600 units following the Chinese New Year due to a large number of new orders.

Also in March, the Company's subsidiary, Jingzhou Hengsheng Automotive System Co., Ltd., welcomed officials of the Hubei Provincial Government to visit its facilities. Hubei is very important to auto manufacturing in China as it is the headquarters of the second largest Chinese automotive OEM, Dongfeng Motors, and the second largest steel maker, Wisco.

2009 Outlook

Management expects revenue growth to be between 10-15%. These targets are based on the Company's current views on operating and market conditions, which are subject to change.

Mr. Qizhou Wu, the Company's Chief Executive Officer, commented, "We believe the worst of the economic crisis in China is now behind us. In January 2009, China overtook the United States to become the world's largest automotive market. We anticipate that the stimulus packages in China will continue to generate greater economic activity, resulting in further growth in the domestic automotive market of 2009."

About China Automotive Systems, Inc.

Based in Hubei Province, People's Republic of China, China Automotive Systems, Inc. is a leading supplier of power steering components and systems to the Chinese automotive industry, operating through seven Sino-foreign joint ventures. The Company offers a full range of steering system parts for passenger automobiles and commercial vehicles. The Company currently offers 4 separate series of power steering and 307 models of power steering with an annual production capacity of 1.3 million sets, steering columns, steering oil pumps and steering hoses. Its customer base is comprised of leading Chinese auto manufacturers such as China FAW Group, Corp., Dongfeng Auto Group Co., Ltd., Brilliance China Automotive Holdings Ltd., Beiqi Foton Motor Co., Ltd. and Chery Automobile Co., Ltd., etc. For more information, please visit: http://www.caasauto.com .

Safe Harbor Statement

This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations or beliefs, including, but not limited to, statements concerning the Company's operations, financial performance and condition, and the impact of acquisitions on its financial performance. For this purpose, statements that are not statements of historical fact may be deemed to be forward-looking statements. The Company cautions that these statements by their nature involve risks and uncertainties, and actual results may differ materially depending on a variety of important factors, including, among others, the impact of competitive products, pricing and new technology; changes in demand for the Company's products; changes in consumer preferences and tastes; and effectiveness of marketing; changes in laws and regulations; fluctuations in costs of production, delays and cost overruns related to developing and opening new production facilities; and other factors as those discussed in the Company's reports filed with the Securities and Exchange Commission from time to time.

    For further information, please contact:

     Jie Li
     Chief Financial Officer
     China Automotive Systems
     Email: jieli@chl.com.cn

     Kevin Theiss
     Investor Relations
     Grayling
     Tel:   +1-646-284-9409
     Email: ktheiss@hfgcg.com



                                  Tables Follow -
-




               China Automotive Systems, Inc. and Subsidiaries
                         Consolidated Balance Sheets
                          December 31, 2008 and 2007
                           (audited, U.S. dollars)


                                                       December 31,
                                                 2008               2007
    ASSETS
    Current assets:
    Cash and cash equivalents                 $37,113,375        $19,487,159
    Pledged cash deposits                       6,739,980          4,645,644
    Accounts and notes receivable,
     net, including $1,285,110 and
     $1,869,480 from related parties
     at December 31, 2008 and 2007, net
     of an allowance for doubtful
     accounts of $4,910,478 and
     $3,827,838 at December 31, 2008
     and 2007                                  96,424,856         82,022,643
    Advance payments and others,
     including $9,374 and $55,323
     to related parties at December
     31, 2008 and 2007                          1,442,614            922,578
    Inventories                                26,571,755         20,193,286

    Total current assets                     $168,292,580       $127,271,310

    Long-term Assets:
    Property, plant and equipment,
     net                                      $51,978,905        $46,585,041
    Intangible assets, net                        504,339            589,713

    Other receivables, net, including
     $903,674 and $638,826 from
     related parties at December 31,
     2008 and 2007, net of an allowance
     for doubtful accounts of $659,837
     and $652,484 at December 31, 2008
     and 2007                                   1,349,527            888,697
    Advance payment for property,
     plant and equipment, including
     $2,473,320 and $1,560,378 to
     related parties at December 31,
     2008 and 2007                              6,459,510          6,260,443
    Long-term investments                          79,010             73,973
    Deferred income tax assets                  2,383,065          1,315,510

    Total assets                             $231,046,936       $182,984,687

    LIABILITIES AND STOCKHOLDERS' EQUITY
    Current liabilities:
    Bank loans                                 $7,315,717        $13,972,603
    Accounts and notes payable,
     including $1,097,641 and
     $1,134,817 to related parties
     at December 31, 2008 and 2007             59,246,043         47,530,383
    Convertible notes payable, net,
     including $2,077,923 for discount
     of convertible note payable at
     December 31, 2008                         32,922,077                 --
    Derivative liabilities                      1,502,597                 --
    Customer deposits                             236,018            135,627
    Accrued payroll and related costs           2,715,116          2,664,464
    Accrued expenses and other
     payables                                  12,460,784         14,938,055
    Accrued pension costs                       3,806,519          3,622,729
    Taxes payable                               5,717,438          9,080,493
    Amounts due to
     shareholders/directors                       337,370            304,601

    Total current liabilities                $126,259,679        $92,248,955

    Long-term liabilities:
    Advances payable                              234,041            334,600

    Total liabilities                        $126,493,720        $92,583,555

    Minority interests                        $23,222,566        $23,166,270

    Related Party Transactions
    Commitments and contingencies
    Stockholders' equity:
    Preferred stock, $0.0001 par
     value - Authorized - 20,000,000
     shares Issued and Outstanding -
     None                                             $--                $--
    Common stock, $0.0001 par value -
     Authorized - 80,000,000 shares
     Issued and Outstanding -
     26,983,244 shares and 23,959,702
     shares at December 31, 2008 and
     2007, respectively                             2,698              2,396
    Additional paid-in capital                 27,148,206         30,125,951
    Retained earnings - Appropriated            7,525,777          7,525,777
    Unappropriated                             36,026,516         23,591,275
    Deferred stock compensation                  (500,052)
    Accumulated other comprehensive
     income                                    11,127,505          5,989,463

    Total stockholders' equity                $81,330,650        $67,234,862

    Total liabilities and
     stockholders' equity                    $231,046,936       $182,984,687





               China Automotive Systems, Inc. and Subsidiaries
                     Consolidated Statements of Earnings
                    Years Ended December 31, 2008 and 2007
                           (audited, U.S. dollars)


                                                 Years Ended December 31
                                                  2008              2007
    Net product sales, including
     $4,675,410 and $5,472,509 to
     related parties for Years Ended
     December 31, 2008 and 2007               $163,179,286      $133,597,003
    Cost of product sold, including
     $7,901,944 and $5,472,595 purchased
     from related parties at Years Ended
     December 31, 2008 and 2007                115,920,585        88,273,955

    Gross profit                               $47,258,701       $45,323,048

    Add: Gain on other sales                       734,063           554,150

    Less: Operating expenses
    Selling expenses                            10,869,661         9,674,476
    General and administrative expenses         12,097,500         9,026,717
    R&D expenses                                 2,255,892         1,666,274
    Depreciation and amortization                5,846,290         4,243,930

    Total Operating expenses                    31,069,343        24,611,397

    Income from operations                     $16,923,421       $21,265,801

    Add: Other income, net                       1,067,309            38,462
    Financial income (expenses)                 (1,296,218)         (566,986)
    Gain (loss) on change in fair value
     of derivative                                 998,014                --

    Income before income taxes                  17,692,526        20,737,277
    Less: Income taxes                             185,877         2,231,032

    Income before minority interests            17,506,649        18,506,245
    Less: Minority interests                     5,071,408         9,646,339

    Net income                                 $12,435,241        $8,859,906

    Net income per common share -
    Basic                                            $0.48             $0.37
    Diluted                                          $0.46             $0.37

    Weighted average number of common
     shares outstanding -
    Basic                                       25,706,364        23,954,370
    Diluted                                     29,668,726        23,958,705

The officials from the Hubei Provincial Government and the Hubei Provincial Ministry of Technology visited Hengsheng. Established in October 2007, this CAAS subsidiary produces high-end products mainly focused to meet the stringent quality demands of Chinese Joint Ventures and the global export market. Equipped with state-of-the-art machine tools, assembly lines, and testing equipment in a 200,000 square meter facility, Hengsheng has a designed annual production capacity of 1.3 million units. As a wholly owned foreign enterprise, Hengsheng benefits from an income tax exemption through 2010 followed by preferential tax treatment (at a 15% rate) for the following 3 years thereafter.

Mr. Qizhou Wu, China Automotive Systems's CEO, commented, ''Hengsheng is a good example for China's statement for a world-class auto parts facility. With our North American purchase order, we have entered the global marketplace. We plan to have all our products up to global quality standards so we can sell additional products and better penetrate the multi-billion dollar market for power steering systems. We anticipate domestic OEMs are proactively revamping their vehicles' quality standards which will require higher performance key components. We see this as our opportunity to strengthen relationships with OEMs.''

''It was an honor for the officials from the Hubei Provincial Government to visit and take a keen interest in our operations and plans. Hubei is a very important auto manufacturing hub in China as it is the home of the 2nd largest Chinese OEM, Dongfeng Motors, and the 2nd largest steel maker, Wisco. The Hubei government has been instrumental in developing the industrial infrastructure and upstream suppliers in Hubei province. We appreciate their support as we continue to develop into a global player for advanced steering technology,'' Mr. Wu concluded.

About CAAS

Based in Hubei Province, People's Republic of China, China Automotive Systems, Inc. is a leading supplier of power steering components and systems to the Chinese automotive industry, operating through seven Sino-foreign joint ventures. The Company offers a full range of steering system parts for passenger automobiles and commercial vehicles. The Company currently offers 4 separate series of power steering and 307 models of power steering with an annual production capacity of over 1.3 million sets, steering columns, steering oil pumps and steering hoses. Its customer base is comprised of leading Chinese auto manufacturers such as China FAW Group, Corp., Dongfeng Auto Group Co., Ltd., Brilliance China Automotive Holdings Ltd., Beiqi Foton Motor Co., Ltd. and Chery Automobile Co., Ltd., etc. For more information, please visit: http://www.caasauto.com

Safe Harbor Statement

This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations or beliefs, including, but not limited to, statements concerning the Company's operations, financial performance and condition, and the impact of acquisitions on its financial performance. For this purpose, statements that are not statements of historical fact may be deemed to be forward-looking statements. The Company cautions that these statements by their nature involve risks and uncertainties, and actual results may differ materially depending on a variety of important factors, including, among others, the impact of competitive products, pricing and new technology; changes in demand for the Company's products; changes in consumer preferences and tastes; and effectiveness of marketing; changes in laws and regulations; fluctuations in costs of production, delays and cost overruns related to developing and opening new production facilities; and other factors as those discussed in the Company's reports filed with the Securities and Exchange Commission from time to time.

    For further information, please contact:

     Jie Li
     Chief Financial Officer
     China Automotive Systems
     Email: jieli@chl.com.cn

     Kevin Theiss
     Investor Relations
     Grayling
     Tel:   +1-646-284-9409
     Email: ktheiss@hfgcg.com

The Company's customers, including Shanxi Provincial Automobile Industry Group Co., Ltd. (''Shanqi'') and Beiqi Futon Motor Company (''Beiqi Futon''), have been among the fastest-growing commercial vehicle OEMs in China over the past few months. Both companies are already among the top 10 commercial vehicle manufacturers in China.

Mr. Qizhou Wu, China Automotive Systems's CEO, commented, ''We see an early sign of recovery in the commercial vehicle market in China from the stimulus plan enacted by the Chinese government. We expect that the fast-growing infrastructure build-out is likely propelling truck sales. CAAS is well positioned to benefit from the infrastructure expansion as it already has many leading commercial vehicle OEMs as customers. We have utilized the recent low growth period for commercial vehicles, to improve the facility and complete equipment maintenance. Now, we are ready to increase production to meet rising demand again.''

About CAAS

Based in Hubei Province, People's Republic of China, China Automotive Systems, Inc. is a leading supplier of power steering components and systems to the Chinese automotive industry, operating through seven Sino-foreign joint ventures. The Company offers a full range of steering system parts for passenger automobiles and commercial vehicles. The Company currently offers 4 separate series of power steering and 307 models of power steering with an annual production capacity of 1.3 million sets, steering columns, steering oil pumps and steering hoses. Its customer base is comprised of leading Chinese auto manufacturers such as China FAW Group, Corp., Dongfeng Auto Group Co., Ltd., Brilliance China Automotive Holdings Ltd., Beiqi Foton Motor Co., Ltd. and Chery Automobile Co., Ltd., etc. For more information, please visit: http://www.caasauto.com

Safe Harbor Statement

This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations or beliefs, including, but not limited to, statements concerning the Company's operations, financial performance and condition, and the impact of acquisitions on its financial performance. For this purpose, statements that are not statements of historical fact may be deemed to be forward-looking statements. The Company cautions that these statements by their nature involve risks and uncertainties, and actual results may differ materially depending on a variety of important factors, including, among others, the impact of competitive products, pricing and new technology; changes in demand for the Company's products; changes in consumer preferences and tastes; and effectiveness of marketing; changes in laws and regulations; fluctuations in costs of production, delays and cost overruns related to developing and opening new production facilities; and other factors as those discussed in the Company's reports filed with the Securities and Exchange Commission from time to time.

    For further information, please contact:

    Jie Li
    Chief Financial Officer
    China Automotive Systems
    Email: jieli@chl.com.cn

    Kevin Theiss
    Investor Relations
    Grayling
    Tel:   +1-646-284-9409
    Email: ktheiss@hfgcg.com

SOURCE China Automotive Systems, Inc.

Source: PR Newswire (March 11, 2009 - 8:59 AM EDT)

Henglong is focused on the large-scale production of high-quality power steering products. WanAn is focused on manufacturing steering pumps for the Company's customers.

Mr. Qizhou Wu, Chief Executive Officer of China Automotive Systems, stated, "We are beginning to see results from the government stimulus packages targeting the general economy and also the auto industry. Small-engine vehicles with low emissions have been growing particularly fast in early 2009 in response to the incentives in the stimulus for both the urban and rural markets.''

About CAAS

Based in Hubei Province, People's Republic of China, China Automotive Systems, Inc. is a leading supplier of power steering components and systems to the Chinese automotive industry, operating through seven Sino-foreign joint ventures. The Company offers a full range of steering system parts for passenger automobiles and commercial vehicles. The Company currently offers 4 separate series of power steering and 307 models of power steering with an annual production capacity of 1.3 million sets, steering columns, steering oil pumps and steering hoses. Its customer base is comprised of leading Chinese auto manufacturers such as China FAW Group, Corp., Dongfeng Auto Group Co., Ltd., Brilliance China Automotive Holdings Ltd., Beiqi Foton Motor Co., Ltd. and Chery Automobile Co., Ltd., etc. For more information, please visit: http://www.caasauto.com

Safe Harbor Statement

This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations or beliefs, including, but not limited to, statements concerning the Company's operations, financial performance and condition, and the impact of acquisitions on its financial performance. For this purpose, statements that are not statements of historical fact may be deemed to be forward-looking statements. The Company cautions that these statements by their nature involve risks and uncertainties, and actual results may differ materially depending on a variety of important factors, including, among others, the impact of competitive products, pricing and new technology; changes in demand for the Company's products; changes in consumer preferences and tastes; and effectiveness of marketing; changes in laws and regulations; fluctuations in costs of production, delays and cost overruns related to developing and opening new production facilities; and other factors as those discussed in the Company's reports filed with the Securities and Exchange Commission from time to time.

    For further information, please contact:

    Jie Li
     Chief Financial Officer
     China Automotive Systems
     Email: jieli@chl.com.cn

    Kevin Theiss
     Investor Relations
     Grayling
     Tel:   +1-646-284-9409
     Email: ktheiss@hfgcg.com

China Automotive Systems supplied approximately 75% of the power steering units used by Chery Auto in 2008. Sales to Chery Auto represented approximately 16% of China Automotive Systems' total revenues.

WHAS is based in Wuhu, Anhui Province where Chery Auto's headquarters is based. In 2005, China Automotive Systems and Chery Auto formed the joint venture, WHAS, to focus on the large-scale production of high-quality power steering products. These awards reflect WHAS's superior product quality, stringent cost control, and strong production management. Since its inception, WHAS is mostly committed to satisfy Chery Auto's rising need for advanced power steering systems for its 10 different models of Chery vehicles.

Mr. Qizhou Wu, Chief Executive Officer of China Automotive Systems, stated, "We are pleased to receive the Best Auto Component Supplier award this year along with being recognized as a Best Core Supplier again from China's leading automotive brand. These awards recognize our solid OEM relationships and our superior product quality, and we are proud that our products continue to be recognized by our domestic customers as they are proactively upgrading their quality standards for both Chinese market and exports. We look forward to continuing our development of state-of-the-art power steering units as we expand our presence in both the Chinese and global markets.''

Chery Auto has produced over 1 million car units and in 2008, it was the leader among the independent domestic brands for: (1) total units sold in the China market, (2) the most units exported and (3) it was the largest supplier of small-displacement vehicles in China. Chery Auto forecasts that it expects to manufacture approximately 400,000 automobiles in 2009, up from 356,000 units in 2008. Thanks to the recent government auto industry stimulus and rising small car demand, Chery Auto led China OEM unit sales and sold approximately 35,000 cars in January 2009, a new Company record high sales for a single month. Chery also recently launched its A5 BSG hybrid model which is China's first BSG ''Belt Driven Starter Generator'' hybrid vehicle as well as Chery's first new energy car model. The A5 BSG comes into the market like a ''green'' blockbuster, which signals that Chery is one step ahead of others on new energy products. BSG is a hybrid technology which is able to shut off the engine temporarily when the vehicle is stopped. Chery has also been awarded the first prize by the National Science & Technology Awards Conference for its Energy Saving and Environment Protection Auto Technology Platform Construction Project, which includes the A5 BSG. For the 3rd time since 2006, Chery was chosen as one of the ''Most Admirable Chinese'' companies jointly by Fortune Magazine, a world's leading business & financial magazine, and Hay Group, one of the largest consulting groups with worldwide reputation. Additionally, Chery has been selected as one of the ''Top 20 Chinese Companies with Global Competitiveness'' from the latest research conducted by Roland-Berger, a global well-know strategic management company.

About CAAS

Based in Hubei Province, People's Republic of China, China Automotive Systems, Inc. is a leading supplier of power steering components and systems to the Chinese automotive industry, operating through seven Sino-foreign joint ventures. The Company offers a full range of steering system parts for passenger automobiles and commercial vehicles. The Company currently offers 4 separate series of power steering and 307 models of power steering with an annual production capacity of 1.3 million sets, steering columns, steering oil pumps and steering hoses. Its customer base is comprised of leading Chinese auto manufacturers such as China FAW Group, Corp., Dongfeng Auto Group Co., Ltd., Brilliance China Automotive Holdings Ltd., Beiqi Foton Motor Co., Ltd. and Chery Automobile Co., Ltd., etc. For more information, please visit: http://www.caasauto.com

Safe Harbor Statement

This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on current expectations or beliefs, including, but not limited to, statements concerning the Company's operations, financial performance and condition, and the impact of acquisitions on its financial performance. For this purpose, statements that are not statements of historical fact may be deemed to be forward-looking statements. The Company cautions that these statements by their nature involve risks and uncertainties, and actual results may differ materially depending on a variety of important factors, including, among others, the impact of competitive products, pricing and new technology; changes in demand for the Company's products; changes in consumer preferences and tastes; and effectiveness of marketing; changes in laws and regulations; fluctuations in costs of production, delays and cost overruns related to developing and opening new production facilities; and other factors as those discussed in the Company's reports filed with the Securities and Exchange Commission from time to time.

    For further information, please contact:

     Jie Li
     Chief Financial Officer
     China Automotive Systems
     Email: jieli@chl.com.cn

     Kevin Theiss
     Investor Relations
     Grayling
     Tel:   +1-646-284-9409
     Email: ktheiss@hfgcg.com