Source : @BernamaBiz
KUALA LUMPUR, November 4, 2026 – Sapura Industrial Bhd’s wholly-owned subsidiary, Sapura Machining Corporation Sdn Bhd, has signed a master purchase agreement with Chery Corporate Malaysia Sdn Bhd to assemble front and rear axle systems for selected vehicle programmes, under a contract worth an estimated RM307 million, Bernama reported.
Chery Corporate Malaysia is the official regional arm and distributor in Malaysia of China’s Chery Automobile Group.
In a filing with Bursa Malaysia on Wednesday, Sapura Industrial said the work will be carried out at its facility in Bukit Beruntung, Selangor, over a period of four and a half years. The deal is the group’s first direct engagement with Chery, the company said.
ICE, hybrid and electric platforms
According to Bernama, the contract covers the assembly of axle systems for Chery’s internal combustion engine (ICE), hybrid electric vehicle (HEV) and battery electric vehicle (BEV) platforms, including the JAECOO J5 and vehicles under the LEPAS brand.
The axle is one of the core parts of a car, carrying the weight of the vehicle and linking the wheels to the suspension and drivetrain, so the contract places a local supplier inside the production chain for several of Chery’s models sold in Malaysia.
The company said the project is a strategic step in the manufacturing and assembly initiatives of Sapura Industrial and its subsidiaries.
“Apart from being in line with Chery’s localisation plans, it also supports Malaysia as an automotive manufacturing hub, enhances access to new market opportunities and reinforces the company’s position as a trusted growth partner in advanced industrial manufacturing and assembly in Malaysia and the region,” the automotive components manufacturer said, as quoted by Bernama.
Earnings boost expected this financial year
Sapura Industrial said the project is expected to begin in the second half of its financial year ending January 31, 2027, and to contribute positively to its earnings and earnings per share for that financial year.
Managing director Datuk Syed Izuan Syed Kamarulbahrin said the contract showed the confidence global carmakers have in Malaysia’s automotive supply chain and in local partners with proven technical expertise, operational strength and high quality standards.
“We are pleased to establish a long-term partnership with Chery, supporting its localisation objectives and contributing to the advancement of Malaysia’s automotive industry,” he said.
Chery praises local partner
Chery Corporate Malaysia vice-president Cheng Namweng said Malaysia plays a key role in Chery’s plans for regional expansion, and that capable local partners remain central to its strategy.
“We have seen firsthand Sapura Industrial’s professionalism, technical expertise and responsiveness throughout our engagement,” he said.
“The team has consistently demonstrated strong execution and a quality-focused approach, and we are confident in Sapura Industrial as a trusted partner as we continue expanding,” he added, according to Bernama.
Chinese carmakers have been expanding their presence in Malaysia in recent years, and localising the production of components is one way for them to deepen their footprint while giving Malaysian suppliers new business. For Sapura Industrial, a long-established maker of automotive components, the Chery deal adds a new customer to its order book as the market shifts towards hybrid and electric models.
The agreement also fits the wider push to keep Malaysia attractive as a regional base for vehicle manufacturing and assembly, with local firms taking a larger share of the work as more brands assemble cars in the country.
Source : Bernama
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