Dec 8, 2020 - 12:07 pm

VW takes majority stake in joint venture with JAC

Volkswagen has now taken over the majority stake of the joint venture with JAC with 75 per cent, which also means management control. The company was immediately renamed from JAC Volkswagen to Volkswagen (Anhui) Automotive Company Limited since an eMobility hub is to be established in Anhui Province.

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The new competence centre and e-mobility hub will serve the entire Volkswagen Group in China from Anhui province. The German carmaker has already inaugurated a new research and development centre at the focus of activities in Hefei.

According to VW Group boss Herbert Diess, the company has invested around one billion euros in the joint venture with JAC this year. “Volkswagen Anhui is a promise for stronger partnership and e-mobility power in China,” Diess said. “Within the next three years, we can expect state-of-the-art MEB production, a new full-electric portfolio and technology solutions from its R&D centre in Anhui”.

The billion mentioned by Diess already includes the increase in the shareholding from 50 to 75 per cent and the acquisition of 50 per cent of JAG, the parent company of Volkswagen’s joint venture partner JAC. VW first announced its intention to seek a majority stake in the joint venture in May this year. The same month, Volkswagen’s Spanish subsidiary Seat announced plans to enter China by means of the JAC Volkswagen joint venture that continues to drive Seat’s market entry strategy.

That being said, the ID.2 is considered a hot candidate as the first important project. According to several media reports from the end of November, Volkswagen wants to develop the long announced MEB small car in China together with JAC, although this has not been officially confirmed. Chinese media reports said that the first vehicle would initially only be built in China and exported to Europe from there. From 2023, production of electric cars based on MEB is to start in Anhui.

For this purpose, the infrastructure is to be built and the production lines equipped from 2021. In addition, Volkswagen is planning its own battery assembly on site. The MEB factory in Hefei, with a capacity of up to 350,000 cars per year, is scheduled to be completed by the end of 2022 so that series production can start in 2023.

As China board member Stephan Wöllenstein says, the focus will not only be on product development, but also on the further development of production. “Through this new R&D centre, we will strengthen the local expertise and production efficiency of Volkswagen (Anhui), which will play a key role in rapidly growing and optimising our NEV portfolio to address the differing needs of Chinese customers in what is the world’s largest NEV market.”

Hefei is known for being a hotspot of electric vehicle making. After Volkswagen bought the largest share in Chinese battery manufacturer Gotion High-Tech last May, the latter is now planning to build a factory for cathode materials with a high nickel content in Hefei. Volkswagen’s MEB plant will not be the only electric car factory in Hefei. The provincial and city governments of Anhui and Hefei respectively were also instrumental in saving Nio. State financial institutions have granted the struggling electric car manufacturer a billion-dollar credit line, in return for which Nio committed to building factories and research centres in the city. Currently, Nio’s vehicles are being built jointly with JAC.

Update 06 January 2021: Volkswagen announced the appointment of a new management team headed by China Board Member Stephan Wöllenstein for Volkswagen Anhui. Appointed are Jörg Mull as Chief Finance Officer, Ludger Lührmann as Chief Technology Officer, Harry Schneider as Chief Production Officer and Shao Jian as Chief Human Resource Officer. In the run-up, the former eMobility board member, Thomas Ulbrich, was also reportedly offered a position on the board. However, Ulbrich has apparently turned down the offer, preferring instead to leave the Group “in the near future”. (Update)


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