Sapura Industrial Berhad is set to assemble front and rear axle systems for selected Chery vehicle programmes in Malaysia under a RM307 million contract, marking its first direct partnership with the Chinese automotive manufacturer.
The 4.5-year agreement was signed between Sapura Industrial’s wholly owned subsidiary, Sapura Machining Corporation Sdn Bhd (SMC), and Chery Corporate Malaysia Sdn Bhd.
The programme covers 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 assembly work will take place at Sapura Industrial’s new facility in Bukit Beruntung, Selangor, as Chery continues to expand its local manufacturing and supplier network.
Interestingly, while LEPAS is included in the contract, whether the brand will actually make it to Malaysian showrooms remains an open question.
A New Chapter for Sapura Industrial
For Sapura Industrial, the contract represents a significant milestone in its efforts to diversify its customer base and strengthen its position as a supplier to global automotive manufacturers.
The company brings more than four decades of experience in precision machining, suspension systems, automotive assemblies and advanced manufacturing.
The new Bukit Beruntung facility will support the Chery programme while potentially creating opportunities for broader collaboration within Malaysia’s automotive supply chain.
The partnership also aligns with Chery’s localisation strategy as the automaker expands its operations in Malaysia and the wider ASEAN region.
As more Chinese automotive manufacturers establish a local presence, partnerships with Malaysian component suppliers could play a bigger role in supporting production, strengthening supply chain resilience and developing domestic manufacturing capabilities.
For Chery, the agreement represents another step towards building a more localised operation. For Sapura Industrial, it provides a valuable opportunity to work directly with a major automotive manufacturer across multiple powertrain platforms.
Whether the LEPAS brand eventually joins Chery’s Malaysian lineup is another matter entirely, but the axle assembly contract itself marks a tangible development in the country’s automotive localisation efforts.
Chery’s Axle Controversy Adds Context
The announcement arrives against the backdrop of Chery’s previous axle-related issues in Malaysia, particularly those involving the Omoda 5.
In April 2024, Chery Malaysia initiated a precautionary recall involving 600 Omoda 5 units following a reported rear axle failure. The company attributed the issue to a supplier’s welding equipment calibration problem.
The model came under renewed scrutiny following another rear axle detachment incident in Johor Bahru in October 2026. The incident prompted further regulatory attention and a recall involving affected Omoda 5 vehicles.
Against this background, the latest agreement puts the spotlight on axle assembly and manufacturing quality within Chery’s local supply chain.
However, Sapura Industrial’s announcement does not state that the contract is connected to the Omoda 5 recall, nor does it confirm that the company will assemble replacement or revised axle components for the model.
Instead, the agreement covers selected future Chery programmes, including the JAECOO J5 and LEPAS models.
