Company: CAAS
Filing Date: 2025-08-04
Form Type: 424B3
Source: 0001104659-25-073486
Chunk: 39

Company: China Automotive Systems, Inc.
Filing Date: 2025-08-04
Form: 424B3
Chunk 39
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ger because of, among other reasons, changes in existing or proposed laws, our determination that the Redomicile Merger would involve
tax or other risks that outweigh their benefits, our determination that the level of expected benefits associated with the Redomicile
Merger would otherwise be reduced, a dispute with the taxation authorities over the Redomicile Merger (or certain aspects thereof), an
unexpected increase in the costs to complete the Redomicile Merger or any other determination by our Board of Directors that the Redomicile
Merger would not be in the best interests of the Company or its stockholders or that the Redomicile Merger would have material adverse
consequences to the Company or its stockholders.

Risks Related to the Company’s Business and Industry

The cyclical nature of automotive production and sales could result in a reduction in automotive sales, which could adversely affect the Company’s business and results of operations.

The Company’s business relies on automotive
vehicle production and sales by its customers, which are highly cyclical and depend on general economic conditions and other factors,
including consumer spending and preferences and the price and availability of gasoline. They also can be affected by labor relations
issues, regulatory requirements and other factors. In the last two years, the price of automobiles in China has generally declined.
Additionally, the volume of automotive production in China has fluctuated from year to year, which gives rise to fluctuations
in the demand for the Company’s products. Therefore, any significant economic decline 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