Company: CAAS
Filing Date: 2025-07-01
Form Type: F-4
Source: 0001104659-25-064447
Chunk: 42

Company: China Automotive Systems, Inc.
Filing Date: 2025-07-01
Form: F-4
Chunk 42
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 total, these
five customers accounted for 56.9% of total sales in 2024. For the year ended December 31, 2023, approximately 17.2%, 6.4%, 6.1%,
5.5% and 5.2% of the Company’s sales were to Stellantis N.V., BYD Auto Co., Ltd., Hubei Hongrun, Mahindra & Mahindra
Ltd and Chery Automobile Co., Ltd, the Company’s five largest customers in 2023, respectively. In total, these five customers accounted
for 40.4% of total sales in 2023. The loss of, or significant reduction in purchases by, one or more of these major customers could adversely
affect the Company’s business.

The Company may not be able to collect receivables incurred by customers.

The Company currently sells its products on credit
and its ability to receive payment for its products depends on the continued creditworthiness of its customers. Although the Company has
long-term relationships with its major customers, the customer base may change if its sales increase because of the Company’s expanded
capacity. If the Company is not able to collect its receivables, its profitability will be adversely affected.

The Company may be subject to product liability and warranty and recall claims, which may increase the costs of doing business and adversely affect the Company’s financial condition and liquidity.

The Company may be exposed to product liability
and warranty claims if its products actually or allegedly fail to perform as expected or the use of its products results, or is alleged
to result, in bodily injury and/or property damage. The Company started to pay some of its customers’ increased after-sales service
expenses due to consumer rights protection policies of “recall” issued by the Chinese government in 2004, such as the recalling
flawed vehicles policy. Beginning in 2004, automobile manufacturers unilaterally required their suppliers to pay a “3-R Guarantees”
service charge for repair, replacement and refund in an amount of about 1%–5% of the total amount of parts supplied. Accordingly,
the Company has experienced and will continue to experience higher after-sales service expenses. Product liability, warranty and recall
costs may have a material adverse effect on the Company’s financial condition.

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The Company is subject to environmental and safety regulations, which may increase the Company’s compliance costs and may adversely affect its results of operations