Shanghai (Gasgoo)- Volkswagen Group intends to purchase 50% stake in Anhui Jianghuai Automobile Group Holdings Limited (Jianghuai Automobile Holding), the parent company of Anhui Jianghuai Automobile Group Corp., Ltd. (JAC Motors), the Hefei-based automaker said on May 29.

After the capital increase, the equity held by State-owned Assets Supervision and Administration Commission of Anhui Province will be decreased to 50% from 100%, according to a letter of intent signed by the governmental authority, Volkswagen (China) Investment Co.,Ltd., and Jianghuai Automobile Holding.

(JAC Motors' WeChat account)

In addition, the German automaker will have its stake in JAC Volkswagen, an EV joint venture between Volkswagen Group and JAC Motors, rise to 75% from 50%, and obtain the right to administrate the joint venture.

JAC Motors stressed that there will be uncertainties in whether the final deal can be reached and the eventual implementation scheme as an official agreement hasn't been inked yet. The transaction may not generate direct impact on Jianghuai Automobile Holding's 2020 business performance due the long duration from the transaction signing to the execution.

All parties wish to strike a formal agreement about the capital increase before July 31, 2020, according to JAC Motors' statement.

Upon the completion of the stake expansion in JAC Volkswagen, Volkswagen Group will authorize the joint venture to produce the models under the Volkswagen's mainstream brands and its new energy vehicles with an annual output expected to reach between 350,000 units and 400,000 units in 2029. All parties are in the talks on the operational plans of brands, products and volume production.

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