Automotive News Europe — 2024-03-12
Automotive Industry
Volkswagen is exploring local tie-ups to quicken its shift toward electrification in China.
Volkswagen Group plans to boost investment in its only majority-controlled joint venture in China, according to a stock filing by its Chinese partner JAC, as the German automaker expands its business in the world's largest auto market.
JAC Motors, Volkswagen's partner in its third China JV, said the two sides will boost the JV's registered capital to 13.9 bn yuan ($1.94 bn) from 7.4 bn yuan.
JAC will contribute 1.6 bn yuan to Volkswagen Anhui, while Volkswagen's China division will contribute 4.9 bn yuan, with their holdings in the JV remaining unchanged at 25% and 75% respectively, the Chinese company said in a filing to the Shanghai bourse.
The move came as Volkswagen seeks to regain lost ground in the Chinese market where it is exploring local tie-ups to quicken its shift toward electrification.
Volkswagen revealed plans in late November 2023 to develop a new platform for entry-level electric vehicles in China and use more local components to lower costs, following its July 2023 deal with Chinese electric vehicle (EV) startup Xpeng to boost its EV lineup.
Volkswagen signed an agreement on the EV-focused 50:50 JV with JAC in 2017. It secured a controlling 75% stake in the venture in 2020 after Beijing relaxed rules that had previously barred foreign companies from owning majority stakes in local automakers.
The plant of Volkswagen Anhui has been producing Cupra Tavascan EVs for exports to markets including Europe.
VW holds a 50% stake in its JV with SAIC, while its JV with China FAW Group is 60% controlled by FAW.