Chery Malaysia and Sapura Machining Corporation (SMC), a subsidiary of Sapura Industrial Berhad (SIB), have signed a master purchase agreement for the assembly of front and rear axle systems for selected Chery vehicle programmes, Sapura Industrial has announced.

The agreement marks the first direct engagement between Sapura Industrial and Chery. According to the company, the contract is estimated to be worth approximately MYR 307 million (US$ 75.8 million) over a period of four and a half years.

The master purchase agreement covers the assembly of front and rear axle systems for Chery vehicles with internal combustion engine, hybrid and battery-electric powertrains. These include the Jaecoo J5 and vehicles under the Lepas brand, SIB stated.

The project will be undertaken at SIB's facility in Bukit Beruntung, Selangor. According to SIB, the project will strengthen the Sapura Group's presence in one of Malaysia's key automotive hubs, while creating opportunities for wider industry collaboration and value creation across the local automotive ecosystem.

"This represents an important milestone for Sapura Industrial as our first direct engagement with Chery. It underscores the confidence global automotive manufacturers place 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," said Datuk Syed Izuan Syed Kamarulbahrin, managing director of Sapura Industrial Berhad.

"Malaysia plays a key role in Chery's regional expansion ambitions, with capable local partners remaining central to our strategy. Our partnership with Sapura Industrial reflects this commitment and supports our long-term plans in Malaysia, we have seen firsthand Sapura Industrial's professionalism, technical expertise and responsiveness throughout our engagement. The team has consistently demonstrated strong execution and a quality-focused approach. We are confident in Sapura Industrial as a trusted partner as we continue expanding," said Cheng Namweng, vice president of Chery Corporate Malaysia.