Volkswagen AG to acquire a big stake in Chinese EV partner JAC Motors

Date:

Trending

Volkswagen AG is exploring purchasing a big stake in its Chinese electric vehicle joint venture partner JAC Motors and has tapped Goldman Sachs as an adviser on the plan, people with direct knowledge of the matter said.

- Advertisement -

The move by VW, the largest foreign automaker in China, to buy into Anhui Jianghuai Automobile Group (JAC Motors) is the latest by foreign automakers to boost ownership in the world’s biggest car market since Beijing relaxed rules last year.

Rival German automaker BMW agreed in October to buy control of its main joint venture in the country for 3.6 billion euros ($4.05 billion). And Daimler AG plans to increase its stake in local partner BAIC Motor.

- Advertisement -

The stake purchase move shows that JAC would be a key player in VW’s big global bet on EVs and on strong Chinese demand for such vehicles. VW plans to shift a large part of its planned EV production in China to JAC if it ends up getting control of JAC, said one of the people.

Foreigners were previously prevented from controlling any Chinese automaker or joint venture. Beijing last year removed such caps for firms making fully electric and plug-in hybrid vehicles. Limits on commercial vehicle makers ease in 2020 and by 2022 for the wider car market.

Chinese Premier Li Keqiang promised the European Union on Tuesday that Beijing would no longer force foreign companies to share sensitive know-how when operating in China and was ready to discuss new global trading rules on industrial subsidies.

VW, which has a market capitalisation of nearly $85 billion, does not currently own shares in Shanghai-listed JAC, which has a market value of about $1.9 billion, according to Refinitiv data.

The German car giant’s plans are at an early stage but it is keen to take a big stake, said three of the people. Two of them said it will seek to buy shares from JAC’s major shareholders, which, Refinitiv data showed, are mainly state-backed firms owning over 40 percent.

JAC’s parent, Anhui Jianghuai Automobile Group Holding, holds a 24 percent stake and is fully controlled by the local government.

When contacted by Reuters, VW said: “We are carefully watching what the implications are for our business and for our joint venture partners. In this regard we will explore all possible options together with all stakeholders to secure long-term success in China.”

JAC said in a stock exchange filing late on Wednesday that it has been discussing with Volkswagen on deepening joint venture cooperation on new energy vehicles, but that no formal plan had yet been formed.

Goldman declined to comment. The people declined to be identified as the matter was confidential.

JAC shares again rose by their daily 10 percent maximum limit on Thursday, after rising 10 percent the previous day. VW shares ended slightly lower on Wednesday.

“The news shows the bargaining power of companies like JAC and BAIC is stronger, and Volkswagen’s and Daimler’s determination to cooperate with Chinese partners in the long-term is also firm,” said Patrick Yuan, a Hong Kong-based analyst at Jefferies.

VW IN CHINA Wolfsburg-based VW, which delivered 4.21 million cars in mainland China and Hong Kong last year, has operated in China for decades. Besides JAC, it has joint ventures with state-owned FAW Group and SAIC Motor.

It formed its 50:50 JV with JAC in 2017 to research and develop zero-emission passenger cars as the German automaker has committed almost one-third of the industry’s EV spending, about $91 billion. Separately, South Korea’s SK Innovation Co said it is in talks to set up separate battery-making JVs with VW and Chinese partners, Reuters reported on Wednesday.

JAC, China’s 11th largest local automaker by group sales, makes a range of commercial vehicles including pickup trucks and heavy duty trucks. It also produces vehicles for electric car maker NIO Inc.

JAC warned in January of a 770 million yuan net loss for 2018 mainly due to a drop in car sales, compared to a 432 million yuan profit in 2017. Excluding exceptional items such as government subsidies, losses would reach 1.9 billion yuan, the company said. It will release annual results on April 30.

THE SNAPSHOTS

Sign up to get quick snaps of everyday happening, directly in your inbox.

We don’t spam! Read our privacy policy for more info.

- Advertisement -

Support our independent journalism PayPal (Outside India) For PayU (For Indian Readers).

Krishna Mali
Krishna Mali
Founder & Group Editor of TechGraph.

More Latest Stories

More Articles

Salary‑Powered Loans vs. Overdrafts: Choosing the Right Tool for Cash Emergencies

In the face of financial uncertainty, quick access to cash can offer much-needed relief. Whether it’s a medical bill, a delayed reimbursement, or an...

Equity 360 leads $2.5 Mn Growth round Funding for Avis Hospital from NABARD’s NABVENTURES

Avis Hospital, India based specialty centre dedicated to the treatment of varicose veins, has raised $2.5 million in a strategic growth capital round from NABVENTURES, the venture capital arm of the National Bank for Agriculture and Rural Development (NABARD). The investment was strategically facilitated by...

Alphabet Director R. Martin Chavez Granted 2,016 Stock Units

R. Martin Chavez, a director at Alphabet Inc., received 2,016 Class C Google Stock...

Jensen Huang Files to Sell NVIDIA Shares Worth $12.45 Million

Jen-Hsun Huang, President and CEO of NVIDIA Corporation, filed to sell 75,000 shares of...

Alphabet Director Frances Arnold Awarded Stock Units in Annual Grant

Frances Arnold, a director at Alphabet Inc., received 2,016 Class C Google Stock Units...

NVIDIA Director A. Brooke Seawell Files to Sell $8 Mn in Stock

A. Brooke Seawell, a director at NVIDIA Corporation, has filed to sell 49,131 shares...

Profit-Driven: 4 Proven Cost-Cutting Strategies To Scale Your Business Fast

Profitability is obviously about selling plenty of products and services. It’s also about spending...

Larry Page Trust Files to Sell Alphabet Shares

According to a Form 144 filed with the U.S. Securities and Exchange Commission on...

Alphabet Director L. John Doerr Receives Stock Units in Annual Grant

L. John Doerr, a director at Alphabet Inc., received 2,016 Class C Google Stock Units on July 2 as part of the company’s annual...

NVIDIA CEO Jensen Huang Sells Over $28 Mn in Stock Sales Across Three Days

Jen-Hsun Huang, President and CEO of NVIDIA Corporation, sold more than 225,000 shares of...

Aravind Putrevu on CodeRabbit’s Approach to AI Code Review

Speaking with the TechGraph editorial team, Aravind Putrevu, Director of Developer Marketing at CodeRabbit,...

Mark Zuckerberg Files to Sell Meta Stocks Worth $9.78 Million

Meta Platforms CEO and chairman Mark Zuckerberg has filed a Form 144 with the...

IoT Filters and Compliance in Cleanrooms

In today’s world of consistent quality controlled manufacturing, the people who work inside a...

NVIDIA CEO Jensen Huang Files to Sell $12.2 Million in Stock

NVIDIA Corporation (NASDAQ: NVDA), President & CEO, Jen-Hsun Huang has filed to sell 75,000 shares of the company’s common stock, with an estimated market...

From Function to Fashion: Innovative Trends in Pre-Roll Packaging

The industry continues to flourish with innovation at its core, especially when it comes to pre-roll packaging. With markets expanding and consumer culture evolving, the importance of packaging in differentiating products and brands is more pronounced than ever. No longer just a means to...

Maximizing Sales Performance With Altify Insight Map: A How-To Guide

In the competitive realm of sales, leveraging advanced tools and strategies can significantly improve...

What Does It Take to Run a Manufacturing Business?

Running a manufacturing business demands strategic planning, robust infrastructure, and continual adaptation to market...

How is AI being used to detect unusual customer behavior & fraudulent transactions in real-time?

In an era of hyper-digital transactions and global commerce, it has been more difficult...

Ankur Vij of Techjockey on B2B Software Buying Shifts, AI Trends, and Market Expansion

In a conversation with TechGraph, Ankur Vij, Senior Vice President of Business Growth at...

US Senate rejects bid to limit Prez. Trump on Iran Strikes

The Republican-led U.S. Senate on Friday rejected a Democratic-led effort to block President Donald...

Indian Economy Stays Strong: 6.5% Growth, Inflation at 6-Year Low

India’s economy maintained robust momentum in FY25, with real GDP rising by 6.5%, according...

Consumer Expectations vs. Delivery Reality: The Real Challenges of Food Delivery Platforms

Getting food delivered at the doorstep has completely changed how people eat and live....

Why data breaches are getting costlier in India

A data breach occurs when unauthorized individuals gain access to confidential or sensitive information,...

Nvidia CEO Jensen Huang Files to Sell $7.35 Million in Stock

Nvidia Corporation, CEO and President Jensen Huang has filed a notice with the U.S....

Mark Zuckerberg Files to Sell Meta Stocks Worth $9.78 Million

Meta Platforms CEO and chairman Mark Zuckerberg has filed a Form 144 with the...

The Most Overlooked Car Issues That Lead to Costly Repairs Later

Owning a vehicle comes with a myriad of responsibilities, often involving regular maintenance to...

Construction Jobs Expo 2025: RDS Arena, Dublin, Ireland

If you look at the statistics for recent years, you can see that the...

Navigating the Complexities of EV Fleet Financing and Leasing Options in India

As India's transportation sector accelerates towards electrification, the shift from internal combustion engine (ICE)...

Leading Through Uncertainty: Lessons from Building in a Rapidly Evolving Tech Landscape

In the enterprise tech space, uncertainty is no longer the exception—it is the status...

IoT Filters and Compliance in Cleanrooms

In today’s world of consistent quality controlled manufacturing, the people who work inside a...

Why data breaches are getting costlier in India

A data breach occurs when unauthorized individuals gain access to confidential or sensitive information,...

Intel Report: Iran’s Nuclear Progress Delayed but Not Destroyed by US Strikes

A day after the ceasefire between Israel and Iran, striking revelations have emerged from...

Nvidia CEO Jensen Huang Files to Sell $7.35 Million in Stock

Nvidia Corporation, CEO and President Jensen Huang has filed a notice with the U.S....