JAC Motors, Volkswagen China to conduct joint capital increase in Volkswagen Anhui

Published: Mar 13, 2024 15:42

Source: gasgoo

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On March 12, Anhui Jianghuai Automobile Group Co., Ltd. announced plans for a significant capital injection into Volkswagen Anhui, a joint venture with Volkswagen China focusing on new energy vehicles...

Shanghai (Gasgoo)- On March 12, Anhui Jianghuai Automobile Group Co., Ltd. ("JAC Motors" or "JAC") announced plans for a significant capital injection into Volkswagen Anhui, a joint venture with Volkswagen China focusing on new energy vehicles (NEVs).

The proposed capital increase amounts to 6.5 billion yuan, with JAC contributing 1.625 billion yuan in cash and Volkswagen China providing 4.875 billion yuan. Following the completion of this capital infusion, the registered capital of Volkswagen Anhui will ascend from 7.356 billion yuan to 13.856 billion yuan, maintaining the shareholding proportions of JAC and Volkswagen China at 25% and 75%, respectively.

This financial move is poised to deepen the strategic cooperation between JAC and Volkswagen China, enhancing Volkswagen Anhui’s overall capabilities and resilience against market volatilities, thus aligning with the interests of the company's shareholders, said JAC Motors.

The Anhui-based automaker specified that the capital contribution for this investment would span from 2024 to 2025, with payments being made in installments by both JAC and Volkswagen China.

Originally established on December 22, 2017, as "JAC Volkswagen Automotive Co., Ltd.," Volkswagen Anhui was the first joint venture by Volkswagen Group in China dedicated to the development and production of NEVs, with initial stakes equally divided between Volkswagen Group and JAC Motors.

In December 2020, Volkswagen Group's strategic investment to increase its share in the joint venture to 75% was completed, taking over management rights and officially renaming the entity to Volkswagen Anhui. This move underscored Volkswagen's commitment to accelerating the electrification of its fleet in the Chinese market.

Notably, Volkswagen China is also a shareholder in JAC's parent company, JAG (Anhui Jianghuai Automobile Group Holdings Co. Ltd.). On May 29, 2020, JAC Motors announced an agreement for Volkswagen China to acquire a 50% stake in JAG through capital injection, with the Anhui Provincial State-owned Assets Supervision and Administration Commission retaining the remaining 50% and control of the company.

Volkswagen Anhui's production facilities have already gone into operation. According to Hefei Daily, by the end of 2023, the venture had commenced production of the Cupra Tavascan, an all-electric model destined for the European market, with another Volkswagen-branded model expected to roll off the assembly line in 2024.

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