China Automotive Systems Reports 19.9% Increase in Net Product Sales for Q1 2025

China Automotive Systems, Inc. (CAAS) reported its financial results for the first quarter of 2025, revealing a net product sales increase of 19.9% to $167.1 million, compared to $139.4 million in the same period of 2024. The company's gross profit rose to $28.6 million, up from $24.1 million year-over-year. However, net income attributable to the parent company’s common shareholders decreased by 13.9% to $7.1 million, down from $8.3 million in the prior year, reflecting increased operating expenses and a higher tax burden.

The company experienced significant changes in its cost structure, with total operating expenses rising to $21.1 million from $14.9 million in the previous year. This increase was driven by higher research and development expenses, which surged by 64% to $8.7 million, as the company continues to invest in innovation and product development. Selling and administrative expenses also increased, contributing to the overall rise in costs. The gross margin for the quarter was reported at 17.1%, slightly down from 17.3% in the same quarter last year.

Operationally, CAAS has maintained strong relationships with over sixty vehicle manufacturers, including major players like BYD Auto and Ford. The company’s workforce stood at approximately 4,313 employees as of March 31, 2025. The company’s strategic focus on electric power steering systems has paid off, with sales of these products increasing by 54% to $73 million, now representing 43.7% of total net sales. This shift indicates a growing market share in the electric vehicle segment, aligning with industry trends towards electrification.

In terms of liquidity, CAAS reported cash and cash equivalents of $65.2 million, an increase from $57.0 million at the end of 2024. The company’s working capital also improved to $154.7 million, up from $146.2 million. The company has secured various credit facilities totaling $244.4 million, with short-term loans amounting to $66.7 million as of March 31, 2025. Looking ahead, CAAS anticipates continued growth driven by its strategic investments in R&D and expanding its product offerings, particularly in the electric power steering market, while navigating the challenges posed by global economic conditions and trade policies.