JAC Motors' parent firms up cooperation with Volkswagen Group

Shanghai (Gasgoo)- Anhui Jianghuai Automobile Group Holdings Limited (“JAC Holdings” for short), the parent company of JAC Motors, inked on June 11 an investment agreement with Volkswagen (China) Investment Co., Ltd. (“VW China” for short) and the government of Anhui Province to further firm up the cooperation intention formed at the end of May.

(Photo source: Volkswagen Group China)

Upon completion of the aforesaid transaction, JAC Holdings will be evenly held by VW China and State-owned Assets Supervision and Administration Commission of Anhui Province, and will still be controlled by the latter, according to the announcement issued by JAC Motors.

Under the newly-signed agreement, JAC Holdings should issue and VW China should subscribe for 1,791,542,945 yuan ($253,332,592) worth of equity shares representative of JAC Holdings, which will made the registered capital of the Hefei-based company grow to 3,583,085,890 yuan ($506,665,185) once the transaction is finalized.

On the same day, JAC Motor, VW China and JAC Volkswagen (“JV” for short), a NEV joint venture between the former two, struck a deal which will see VW China’s share in the JV increase to 75% from 50%. In accordance with the agreement, the JV’s total registered capital will rise to 7,355,615,280 yuan ($1,040,118,572) from 2 billion yuan ($282,809,400) after 4,516,711,460 yuan ($638,684,230) and 838,903,820 yuan ($118,624,943) worth of new equity stake are acquired by VW China and JAC Motors respectively.

After gaining more shares in the JV, Volkswagen Group will authorize JAC Volkswagen to produce four to five BEV models, according to another agreement signed between JAC Motors and VW China at the same time. Besides, a manufacturing plant that is able to output vehicles at 60 units per hour is set to work at full capacity between 2025 and 2030.

The vehicle plant is expected to increase its annual capacity to 350,000-400,000 units in 2029 from 200,000-250,000 units in 2025.

Volkswagen has found a further partner to secure future demand for batteries for its Chinese e-models. With the signing of binding agreements, VW China will become the largest shareholder in Gotion, with 26% of the shares, through a buy-in of around €1.1 billion. Volkswagen is the first global automaker to invest direct in a Chinese battery supplier. It is planned to complete the deal by the end of 2020, subject to customary regulatory approvals.