Company: CAAS
Filing Date: 2025-07-25
Form Type: F-4/A
Source: 0001104659-25-070492
Chunk: 40

Company: China Automotive Systems, Inc.
Filing Date: 2025-07-25
Form: F-4/A
Chunk 40
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 could result in a reduction in automotive production and
sales by the Company’s customers and could have a material adverse effect on the Company’s results of operations. Moreover,
if the prices of automobiles keep declining, the selling price of automotive parts also would decrease, which would result in lower revenues
and profitability.

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Increasing costs for manufactured components and raw materials may adversely affect the Company’s profitability.

The Company uses a broad range of manufactured
components and raw materials in its products, including castings, electronic components, finished sub-components, molded plastic parts,
fabricated metal, aluminum, steel and resins. Because it may be difficult to pass increased prices for these items on to the Company’s
customers, a significant increase in the prices of the Company’s components and materials could materially increase the Company’s
operating costs and adversely affect its profit margins and profitability.

Because the Company is a holding company with substantially all of its operations conducted through its subsidiaries, its performance will be affected by the performance of its subsidiaries.

The Company almost has no operations independent
of those of Genesis and its subsidiaries, and the Company’s principal assets are its investments in Genesis and its subsidiaries
and affiliates. As a result, the Company is dependent upon the performance of Genesis and its subsidiaries and will be subject to the
financial, business and other factors affecting Genesis as well as general economic and financial conditions. As substantially all of
the Company’s operations are, and will be, conducted through its subsidiaries, the Company will be dependent on the cash flow of
its subsidiaries to meet its obligations.

Because virtually all of the Company’s assets
are, and will be, held by operating subsidiaries, the claims of the Company’s stockholders will be structurally subordinate to all
existing and future liabilities, obligations and trade payables of such subsidiaries. In the event of the Company’s bankruptcy,
liquidation or reorganization, its assets and those of its subsidiaries will be available to satisfy the claims of the Company’s
stockholders only after all of its and its subsidiaries’ liabilities and obligations have been paid in full.

With the automobile parts markets being highly competitive and many of the Company’s competitors having greater resources than it does, the Company may not be able to compete successfully.

The automobile parts industry is a highly competitive
business. The Company’s customers consider criteria including:

| · | quality;                                           |
| · | price/cost competitiveness;                        |
| · | system and product performance;                    |
| · | reliability and timeliness