Company: CAAS
Filing Date: 2025-07-01
Form Type: F-4
Source: 0001104659-25-064447
Chunk: 41

Company: China Automotive Systems, Inc.
Filing Date: 2025-07-01
Form: F-4
Chunk 41
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 and local presence;               |
| · | effectiveness of customer service; and             |
| · | overall management capability.                     |

The Company’s competitors include independent
suppliers of parts, as well as suppliers formed by spin-offs from the Company’s customers, who are becoming more aggressive in selling
parts to other vehicle manufacturers. Depending on the particular product, the number of the Company’s competitors varies significantly.
Many of the Company’s competitors have substantially greater revenues and financial resources than the Company does, as well as
stronger brand names, consumer recognition, business relationships with vehicle manufacturers, and geographic presence than the Company
has. The Company may not be able to compete favorably and increased competition may substantially harm its business, business prospects
and results of operations.

Internationally, the Company faces different market
dynamics and competition. The Company may not be as successful as its competitors in generating revenues in international markets due
to the lack of recognition of its products or other factors. Developing product recognition overseas is expensive and time-consuming and
the Company’s international expansion efforts may be more costly and less profitable than it expects. If the Company is not successful
in its target markets, its sales could decline, its margins could be negatively impacted and it could lose market share, any of which
could materially harm the Company’s business, results of operations and profitability.

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Pricing pressure by automobile manufacturers on their suppliers may adversely affect the Company’s business and results of operations.

Recently, pricing pressure from automobile manufacturers
has been prevalent in the automotive parts industry in China. Virtually all vehicle manufacturers seek price reductions each year.
Although the Company has tried to reduce costs and resist price reductions, these reductions have impacted the Company’s sales and
profit margins. If the Company cannot offset continued price reductions through improved operating efficiencies and reduced expenditures,
price reductions will have a material adverse effect on the Company’s results of operations.

The Company’s business, revenues and profitability would be materially and adversely affected if it loses any of its large customers.

For the year ended December 31, 2024, approximately
20.3%, 18.2%, 6.8%, 6.5% and 5.1% of the Company’s sales were to Stellantis N.V., BYD Auto Co., Ltd., Mahindra & Mahindra
Ltd., Chery Automobile Co., Ltd. and Hubei Hongrun, the Company’s five largest customers in 2024, respectively. In