Chery Auto (HKEX: 9973) is recalling 8,878 Omoda 5 SUVs in Malaysia over potentially defective rear axle welds, after an axle detached from a moving vehicle and Malaysia's regulator suspended new registrations of the model.

The incident involved a 2023 Omoda 5 in Johor Bahru, in the state of Johor, on October 6. The car lost its rear axle and wheels while being driven. No one was injured, Chery said in a statement on Sunday.

The fault sits in the manufacturing process, not the design. Chery's investigation found that some welds on the rear axle trailing arms of vehicles in the affected batch "may lack sufficient strength," creating a risk of weld rupture under extreme conditions. The company said models using this design had already been discontinued.

What does the regulator require?

Malaysia's Road Transport Department (JPJ) acted within days. On October 11 it suspended the Omoda 5's Vehicle Type Approval (VTA) and all new registrations until a technical investigation is completed and the safety risks are confirmed as adequately addressed.

JPJ instructed Chery Malaysia to identify all potentially affected vehicles using part numbers, production batches and VINs. The agency will also run technical audits of the Omoda 5's production and assembly line and of the rear axle component supplier — a rare instance of a national regulator auditing a Chinese OEM's supplier chain directly.

Chery Malaysia is coordinating the recall with JPJ. It will inspect the components and replace them free of charge where necessary. The recall covers the C and H variants of the Omoda 5; the company did not specify the production years of the affected vehicles.

The company stressed that the recall does not affect models currently on sale. The Omoda 5 was discontinued in Malaysia and replaced by the Chery O5 in September 2025. The older car used a torsion beam rear suspension; the O5 uses a multi-link independent rear suspension.

Is this the same defect as 2024?

This is the second rear-axle recall for the Omoda 5 in Malaysia. In April 2024, an Omoda 5's rear axle detached while the vehicle was being driven, prompting Chery to recall 600 vehicles for inspection.

That investigation blamed improperly calibrated rear axle welding equipment. It ultimately identified 60 vehicles produced on August 15, 2023, that required rear axle replacement. Chery Malaysia has not said whether the October 6 incident involves the same defect — a question JPJ's technical audit is now positioned to answer.

Chery has also launched precautionary checks on Omoda 5 vehicles from the same production batch in China and other relevant markets, and said it will disclose the findings promptly.

Why the model matters to Chery's export machine

The Omoda 5 went on sale in China in 2022 but never gained traction at home; monthly volumes failed to exceed 1,000 vehicles from 2023 onward. Chery withdrew it from the domestic market, and the model is now sold primarily overseas.

Chery established Omoda in 2021 as an overseas brand targeting young consumers. Together with Jaecoo, launched in 2022, it forms the O&J brands, which announced in April that combined cumulative global sales had surpassed 1 million vehicles.

The export business that model line feeds is now Chery's growth engine. Chery Group sold 292,308 vehicles in September, up 4.2% year on year, according to data compiled by CnEVPost. Exports accounted for 207,814 of those — a monthly record for a Chinese automaker.

Domestic pressure is pushing Chery the other way: Chinese technology news outlet Leiphone reported last month that the company is considering bringing Omoda and Jaecoo to China to bolster sales.

What to watch next: whether JPJ's technical audit traces the faulty welds to the same equipment calibration blamed in 2024, and whether the VTA suspension is lifted before the audit forces changes at the rear axle supplier.