May 29, 2020 - 11:39 am

VW to take over majority stake in JAC joint venture

Group strengthens its stand in e-mobility in China + Ford cooperation + Management changes

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Volkswagen has officially confirmed its plan to increase its stake in JAC Volkswagen, its joint venture for electric mobility, and to invest around one billion euros in this. The Wolfsburg-based company will invest another billion in a Chinese battery specialist.

With this amount, the Wolfsburgers cover two campaigns at once. Firstly, they are increasing their share in the JAC Volkswagen joint venture from 50 to 75 per cent, thus taking control of the management. On the other hand, VW takes over 50 per cent of JAG (not to be confused with JAC), the state-owned parent company of JAC. Nothing changed in the other two joint ventures with SAIC and FAW.

“By gaining management control, Volkswagen is paving the way for more electric models and infrastructure,” the Wolfsburg-based company writes in a press release. By expanding its position, the company would be “making it a more localized, more sustainability-focused mobility company”. Five more models are planned by 2025, and a factory for electric cars and a research and development centre are also to be built.

VW probably has no objections from the government: The remaining 50 per cent of JAG is held by the government of Anhui province, which has also signed the joint declaration of intent. Although VW points out that the transaction is to be completed by the end of the year, subject to official approvals, a veto seems unlikely.

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Also, Volkswagen is investing around one billion euros in a stake in the Chinese battery manufacturer Gotion High-Tech (also referred to as Guoxuan in other reports). It will become the company’s largest shareholder, with 26 per cent. The investment is intended to secure the future demand for battery capacity for the Chinese electric vehicle models. VW stresses that it is the first international OEM to invest directly in a Chinese battery supplier. Again, subject to approval, the transaction is expected to be completed by the end of 2020.

“The electric cars segment is growing rapidly and offers a great deal of potential for JAC Volkswagen,” says VW CEO Herbert Diess. “We are actively driving forward the development of battery cells in China through our strategic investment in Gotion.” Gotion is currently in the certification process to qualify as a battery supplier for VW. The battery cells could then also be installed in MEB power supplies.

Ford alliance almost ready for launch

China is still an important market for Volkswagen, but there is also an update from the USA: the cooperation with Ford is making progress. The Supervisory Board of the VW Group has approved further projects of the global alliance with Ford formed last year. “This means that the corresponding contracts between the two parties are about to be concluded and should be signed soon,” VW writes.

The plans include Ford using Volkswagen’s Modular E-Drive Kit (MEB) for an electric model in Europe. However, other projects, such as VW’s investment in the software company Argo AI, which belongs to Ford, have not yet been decided. VW has made it clear, however, that no capital links with Ford are planned.

Changes in management

Volkswagen is announcing a Group-wide personnel rotation in Technical Development and the model series: Matthias Rabe will become Board Member for Technical Development at Bentley on August 1. He succeeds Werner Tietz, who will move to Seat as Member of the Board of Management for Technical Development on July 1. Werner Tietz succeeds Axel Andorff, who also takes over as head of the Midsize and MEB series at Škoda on July 1. He succeeds Matthias Glodny, who will become Head of the Construction Kits, Drives and Modules series at the Volkswagen Passenger Cars brand.

volkswagen-newsroom.com (China), volkswagen-newsrooms.com (Ford), volkswagen-newsroom.com (Management)

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Found on electrive.com
https://www.electrive.com/2020/05/29/vw-to-take-over-majority-stake-in-jac-jv/
29.05.2020 11:22