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From Autoblog

Volkswagen knows it needs to shift towards EVs. That was the company's big message at the Paris Motor Show this year, and the same thing is happening in China. VW will work with Jianghuai Automobile (JAC) to develop an electric vehicle to take advantage of both rising vehicle sales in China and the impact of the country's stricter greenhouse-gas emissions mandate. Speaking at the Paris Motor Show, Volkswagen China head Jochem Heizmann said the EV will be of the low-cost variety and will be marketed under a new brand name.

VW signed a memorandum of understanding to work with JAC on a vehicle-making joint-venture last month, and is likely to sign an official agreement by the end of the year. VW also has joint-venture agreements with SAIC Motor Corp. and China FAW Group, with plans to produce a separate EV with them as soon as 2020, but the JAC agreement may allow VW to have EVs on China's roads before then.

Volkswagen continues to try and distance itself from diesel powertrains as it deals with the emissions scandal that broke last year. Meanwhile, China's mandate is for automakers to boost fleetwide fuel economy by almost 40 percent between 2015 and 2020 to about 47 miles per gallon. To that end, VW and its partners will compete against China-based companies such as BYD and Kandi for electric-vehicle sales. Additionally, China may introduce laws similar to California that require automakers that sell more than 50,000 vehicles a year to make electric vehicles within the country.

VW also wants to boost sales of conventional vehicles in China. The company unveiled a China-only version of its Phaeton sedan – called the Phideon – at the Geneva Motor Show earlier this year. Volkswagen confirmed at the time that the model won't be available in the US.
http://www.autoblog.com/2016/10/07/vw-new-china-only-electric-vehicle-new-brand-name/
 

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JAC-VW EV project 15th approved by NDRC

JAC-VW EV project is the 15th such approved by NDRC:

Official: http://www.ndrc.gov.cn/zwfwzx/xzxknew/201705/t20170523_848288.html
Report in English: http://www.reuters.com/article/us-jac-volkswagen-idUSKBN18I15I

Interestingly, the JV company, provisionally "JAC Volkswagen Automobile Co., Ltd.", was set up a fortnight after the approval was received, although the application was made by both parties using that tentative name.

The project is located in the Hefei ETDZ. No additional land acquisition will be necessary but new halls to handle stamping, welding, painting, final assembly, R&D, and battery packs will have to be constructed. A new trademark (brand) needs to be registered, and "SEAT" is one of the possibilities.

Planned total investment is around 750 mn USD.
 

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Re: Introduction to Jianghuai Automobile (JAC)

JAC Volkswagen Automotive Co., Ltd. is the official English name of the JV.
 

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After all the drama over SOL, now this:

VW's Seat to enter China with stake in JAC venture


Volkswagen AG's (VOW.XE) Seat brand targets entering the Chinese market between 2020 and 2021 and could become a shareholder of its Chinese joint venture JAC Volkswagen, the German car group said Monday.

Volkswagen said it, together with Seat, signed a memorandum of understanding with its Chinese partner Anhui Jianghuai Automobile Group Corp. Ltd. (600418.SH), or JAC.

Under the agreement Seat will become a shareholder in the existing joint venture between VW and JAC, "through either a capital increase of JAC Volkswagen or a share transfer from Volkswagen Group China," Volkswagen said.

The three partners also agreed to establish a joint research-and-development center for the development of electric vehicles and autonomous-driving technologies tailored to the Chinese market, among other things.
https://www.marketwatch.com/story/vws-seat-to-enter-china-with-stake-in-jac-venture-2018-07-09

https://in.reuters.com/article/us-germany-china-volkswagen/vw-to-bring-seat-brand-back-to-china-in-2020-21-idINKBN1JZ1ZT
 

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Details of the JAC-VW auto manufacturing project have been publicized. The project is coming up straddling Zhujiang Road in Baohe District of Hefei. The production facilities will be constructed on the south side whereas R&D and testing facilities will be constructed to the north side.

Construction is scheduled to begin next month. Annual production capacity of the plant would be 100,000.

https://new.qq.com/omn/20190426/20190426A098DB.html

The approximate geo coordinates are 31.702571N, 117.234248E. The project is located about one mile north of the JAC-NIO manufacturing facility.
 

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VW & JAC major announcements

The big news today is that Volkswagen AG has announced it will acquire 50% of Hefei-based Anhui Jianghuai Automobile Group Holdings Ltd. This company is currently wholly owned by Anhui Provincial SASAC.

Jianghuai Automobile Group Holdings is the parent of Anhui Jianghuai Automobile Group Corp., Ltd. (i.e. JAC Motors, the manufacturer). JAC Motors, listed on the Shanghai Stock Exchange, is widely held, in which Jianghuai Automobile Group Holdings owns a 25.23% stake. VW AG is not directly buying into JAC Motors though.

Additionally, VW will increase its stake in JAC Volkswagen Automotive Co., Ltd., its 50:50 EV joint venture with JAC Motors, to 75% by purchasing 25% from its partner. VW will be investing around €1 billion on these acquisitions.

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JAC Volkswagen (site) markets the Sihao E20X but -- what perhaps most do not realize -- does not yet manufacture the car. It is made by JAC Motors as JAC-VW's factory is currently under construction; the R&D Center is nearing completion. Recall that JAC Volkswagen was the 15th company to acquire EV production qualification from NDRC in 2017 before the rules were changed. [Contrast with JAC-Nio which has a dedicated factory and produces its vehicles there but does not have a separate license]. JAC-VW delivered 3875 vehicles (wholesale) in 2019; none in 2020. Retail data show 109 units of E20X were registered in the first four months of this year.

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VW AG will invest another €1.1 billion in battery manufacturer Guoxuan High-tech Co., Ltd. ("Gotion") for which it will receive a 26.47% stake, becoming its largest shareholder. This is not related to the JAC deals.
 

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This is a really interesting development. As I get it, JAC is in trouble for quite some time now with its passenger car sales about halved last year. I don't know about the truck division, which is probably the more important part of the business.
I wonder if Volkswagen plans to increase its share in JAC Holdings once the limitations on foreign ownership of car companies are fully lifted (2022?). I could see VW turn JAC into a full blown "VW China" where they can control everything without Chinese interference. It probably beats starting from scratch or trying to take control of SAIC-VW at a much higher price.
 

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This is a really interesting development. As I get it, JAC is in trouble for quite some time now with its passenger car sales about halved last year. I don't know about the truck division, which is probably the more important part of the business.
I wonder if Volkswagen plans to increase its share in JAC Holdings once the limitations on foreign ownership of car companies are fully lifted (2022?). I could see VW turn JAC into a full blown "VW China" where they can control everything without Chinese interference. It probably beats starting from scratch or trying to take control of SAIC-VW at a much higher price.
I think you will see VW use JAC (JAG) as the entry e-mobility brand. VW still has a great relationship with SAIC and FAW respectively.

With the Truck division, you might see VW sell that stake to its Traton truck group and gain more foothold in the Chinese trucking area.

In fact, rumors around 2019 said VW (Audi) was interested in purchasing 10% more into the FAW JV. It would make the JV a 50/50 partnership, instead of the current 60/40 in FAW's favour.
 

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Phaeton,
I'm a bit confused about VW's Traton. After the dieselgate scandal I think they had the intention of selling the entire business, but they ended up floating about 10% of the company in an IPO, with the provision they could raise the percentage of outstanding share to 25%. Don't know if there was simply no buyer for the entire company at the time or if the strategy has been changed voluntarily.

As a matter of fact Traton owns about 15% of USA's Navistar Corporation and has recently offered to buy all remaining shares. Navistar, a truck builder of course, is active in China through a joint venture with … JAC.

Now the limitations on foreign ownership of chinese truck manufacturers end somewhere this year, so I could see VW turn the JAC truck business into a Traton/Navistar operation and the JAC passenger car business into 'VW China' in a few years time.
 

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VW & JAC major announcements

Jianghuai Automobile Group Holdings is the parent of Anhui Jianghuai Automobile Group Corp., Ltd. (i.e. JAC Motors, the manufacturer). JAC Motors, listed on the Shanghai Stock Exchange, is widely held, in which Jianghuai Automobile Group Holdings owns a 25.23% stake.
Anhui Jianghuai Automobile Group Holdings Ltd. has transferred 8.08% of its shares in JAC Motors to Anhui Province State-owned Capital Operation Holdings Group Co., Ltd. (site), reducing its own stake to 17.15%.

https://www.d1ev.com/news/qiye/119640
 

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Phaeton,
I'm a bit confused about VW's Traton. After the dieselgate scandal I think they had the intention of selling the entire business, but they ended up floating about 10% of the company in an IPO, with the provision they could raise the percentage of outstanding share to 25%. Don't know if there was simply no buyer for the entire company at the time or if the strategy has been changed voluntarily.

As a matter of fact Traton owns about 15% of USA's Navistar Corporation and has recently offered to buy all remaining shares. Navistar, a truck builder of course, is active in China through a joint venture with … JAC.

Now the limitations on foreign ownership of chinese truck manufacturers end somewhere this year, so I could see VW turn the JAC truck business into a Traton/Navistar operation and the JAC passenger car business into 'VW China' in a few years time.
I admit at the moment I don't understand what the Volkswagen Group is doing. TRATON??? I thought the same as you.

Didn't know about Navistar - JAC trucks JV, through MAN TRATON is linked with SINOTRUK. I imagine you are correct that they might spin JAC trucks with TRATON group.

They could potentially get VWCO the Brazilian truck firm to build electric trucks with JAC too.
 
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