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JAC and VW Sign Intention to Intensify Cooperation on Automobile Electrification

Date:2020-06-02 Author:Daisy Source:www.chinatrucks.com

Volkswagen plans to acquire 50% of JAG, parent company of Volkswagen’s joint venture partner JAC, and transform JAC Volkswagen by raising Volkswagen share to 75%
Investment amount of around 1 billion Euro
Volkswagen supports Anhui province to advance to hub for electro-mobility

Dr. Herbert Diess: “Together with strong and reliable partners, Volkswagen is strengthening its electrification strategy in China, the world′s biggest market for e-mobility"

Beijing, May 29th, 2020. Today, Volkswagen has initiated an unprecedented chapter for its business and electrification strategy in China. Volkswagen plans to transform JAC Volkswagen, its joint venture for e-mobility, by strengthening its influence to the tune of around 1 billion Euro. Included in this amount is the acquisition of 50% of JAG, the parent company of Volkswagen’s partner JAC, and an increase of shares within JAC Volkswagen from 50% to 75%, thereby gaining management control.

Dr. Herbert Diess, CEO of Volkswagen AG, said: “Together with strong and reliable partners, Volkswagen is strengthening its electrification strategy in China, the world′s biggest market for e-mobility. The electric cars segment is growing rapidly and offers a great deal of potential for JAC Volkswagen. The enhanced partnership will contribute to driving our electrification activities in China further forward and achieving our target of a carbon-neutral fleet by 2050”

Mr. Anjin, CEO of JAG, said: “We are very happy to strengthen our cooperation with world-renowned automobile manufacturer Volkswagen. The automobile electrification development in China is at the forefront in terms of R&D and application. Together with Volkswagen, we will push for the market development of automobile electrification and provide greener, more environmental-friendly electrified automobile products to world consumers”

History granted Volkswagen the opportunity to take the pioneering role in China’s auto industry. The intensified cooperation today exemplifies the further opening up of the country and Volkswagen’s further commitment, as a reliable partner, to the nation. Dr. Stephan W?llenstein, CEO of Volkswagen Group China, said: “It feels great to witness these historic moments in our respectful and trusted Sino-German relations, as Volkswagen is taking a strategic role in JAG. The investment shapes the character of Volkswagen in China, making it a more localized, more sustainability-focused mobility company. By opening up the market, China is giving Volkswagen new business opportunities.”

Transformation of JAC Volkswagen through increased business control

By strengthening its position and advancing the JAC Volkswagen business, Volkswagen takes the next step in its Chinese electrification strategy. Letters of intent were co-signed by Volkswagen (China) Investment Co. Ltd. and the Anhui government, which foresee Volkswagen gaining 50% stake of JAG, the parent company of JAC, as well as raising Volkswagen’s stake from 50% to 75% within JAC Volkswagen. For the first time in automotive industry, a global OEM joins course of State-owned enterprise reform through its strategic investment into JAG, thus fostering its partnership with the country.

The parties intend to close the deal amounting to €1 billion by the end of the year, subject to customary regulatory approvals.

Founded in 2017, JAC Volkswagen’s business is purely focused on the development, production and sales of all-electric cars. The new investment will intensify the already ongoing electrification strategy. A portfolio expansion of up to 5 additional BEV models until 2025 is planned, as well as building full-scale e-model factory and finishing the R&D center in Hefei.

Transactions pave the way to China’s and Volkswagen’s sustainability goals

Together with the Chinese Government, Volkswagen Group China has been dedicated to achieving these new milestones, which as well as standing the Group in good stead for future developments, will at the same time support Anhui Province in becoming a new hub in China for electro-mobility. The production and sales of new energy vehicles in Anhui account for nearly 13% of the national market share.

Over 35 years ago, Volkswagen has helped to put China on wheels by starting to bring private mobility to the country. Its joint ventures SAIC VOLKSWAGEN and FAW-Volkswagen were founded in 1984 and 1991, which foster a friendship of mutual trust and respect. Now, the new milestone investments into e-mobility in China will help to steer Volkswagen’s and China’s second great mobility shift, towards an electric and sustainable future. Volkswagen Group China has already outlined its route to achieving this sustainable future. In 2025, around 1.5 million NEVs are planned for delivery to customers across the country. By 2050, the Group has committed itself to being net carbon neutral, both worldwide and in China. E-mobility will play the major role in reaching this goal, further supported by these new business decisions and investments.

Founded in 1964, JAC is a comprehensive automobile group, encompassing the R&D, production, sales and service of all series of commercial vehicles, passenger vehicles, and power assemblies. It is dedicated to producing advanced energy-saving and new energy automobiles. Over the years JAC has been observing "sustainability, environment, safety, intelligence, connectivity, comfort" as the guiding code to its research and development on key technologies. Meanwhile, JAC has not only been systematically working on the R&D and marketing of new energy automobile products that met the latest national standard but also crafting vehicles that satisfied customers’ demands and trends of the day. Having specifically targeted new energy automobiles as its strategic core business segment, JAC plans to increase its new energy vehicles sales to more than 30% of its overall sales volume in 2025.

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