KUALA LUMPUR (Nov 4): Sapura Industrial Bhd (KL:SAPIND) said on Wednesday it has signed an agreement to assemble front and rear axle systems for Chery vehicles.

The contract is valued at about RM307 million over four and a half years, marking Sapura Industrial’s first direct engagement with the Chinese carmaker, the company said in a statement. The project will be undertaken at Sapura Industrial’s new facility in Bukit Beruntung, Selangor.

“The collaboration complements Chery's ongoing investments in local manufacturing capacity and supplier development as it expands its operations across Malaysia and the Asean region,” said Datuk Syed Izuan Syed Kamarulbahrin, managing director of Sapura Industrial.

Brands under Chery sold in Malaysia also include Omoda, Jaecoo, Jetour, iCaur, and Lepas. Sapura Industrial, meanwhile, manufactures automotive parts such as brake components for Perodua and Toyota.

The agreement with Chery covers the assembly of axle systems for internal combustion engine, hybrid and battery electric vehicles platforms, including the Jaecoo J5 and vehicles under the Lepas brand. Sapura Industrial is expected to invest up to RM3.6 million for the contract.

"Malaysia plays a key role in Chery's regional expansion ambitions with capable local partners remaining central to our strategy,” said Cheng Namweng, a vice-president of Chery Corporate Malaysia Sdn Bhd.