Chery-Sapura RM307 Million Axle Assembly Deal: Models And Malaysia Plans

Chery's new RM307 million axle assembly agreement with Sapura Industrial will cover selected vehicle programmes, including the Jaecoo J5 and vehicles under the Lepas brand.

Front and rear axle systems will be assembled at Sapura's facility in Bukit Beruntung, Selangor, bringing more component assembly work into Chery's growing Malaysian manufacturing network.

What's Behind Chery's RM307 Million Axle Assembly Deal?

Announced on 4 November, the agreement was signed between Chery Corporate Malaysia and Sapura Machining Corporation (SMC), a wholly-owned subsidiary of Sapura Industrial.

Under the master purchase agreement, SMC secured two letters of award covering front and rear axle assembly for selected Chery Group vehicle programmes.

The project marks Sapura's first direct engagement with Chery, with assembly work expected to begin in the second half of its financial year ending 31 January 2027.

Which Chery Group Cars Are Involved?

For motorists following Chery Group's expanding lineup, two names stand out: Jaecoo J5 and Lepas.

The agreement identifies these among the vehicle programmes involved, with assembly work spanning selected internal combustion engine (ICE), hybrid electric vehicle (HEV) and battery electric vehicle (BEV) platforms.

While the Jaecoo J5 and Lepas programmes have been named, the announcement does not identify every model or variant that will use the locally assembled axle systems.

Why Has Chery Chosen Sapura Industrial?

Sapura Industrial brings more than four decades of experience in Malaysia's automotive sector, with capabilities in precision machining, suspension systems and automotive component manufacturing.

The agreement gives Sapura a new international customer and involvement in selected Chery Group vehicle programmes, while Chery expands its Malaysian supplier network.

Chery Corporate Malaysia vice president Cheng Namweng has also highlighted the importance of capable local partners to the group's regional expansion plans, with Sapura's technical experience forming part of the appeal of the partnership.

What Does The Deal Mean For Malaysia's Automotive Industry?

Malaysia's automotive manufacturing industry involves more than assembling completed vehicles. Local companies also play a role in producing and assembling the components used by international carmakers.

Chery's latest agreement adds front and rear axle-system assembly to its local supplier arrangements, complementing its wider Malaysian manufacturing plans, including the Chery Smart Auto Industrial Park in Lembah Beringin, Selangor.

For Malaysia, the significance is another established local supplier participating in vehicle programmes spanning petrol, hybrid and electric technologies.