Conflicts over China partners: VW is increasingly relying on JAC-Anhui for e-cars


Conflicts over China partners
VW is increasingly relying on JAC-Anhui for e-cars

When it comes to e-mobility, Volkswagen relies on China as a location. The collaboration there is now to be expanded with the JAC-Anhui joint venture. The two state partners in the People’s Republic are less pleased with the move.

With the expansion of e-mobility in China, Volkswagen apparently wants to increase its influence on one of its joint ventures and thus risks conflicts with other partners. The German group is in talks about the purchase of another factory from the Chinese company JAC, said three people familiar with the matter to the Reuters news agency.

The world’s second largest car manufacturer secured a majority stake in the JAC-Anhui joint venture last year after the Beijing government relaxed the rules for foreign participation. VW had already taken control of one of the plants in the east Chinese city of Hefei. A center for VW e-cars is currently being built there.

The two state partners SAIC and FAW fear disadvantages should Volkswagen turn to JAC more. According to insiders, they wanted assurances that their businesses would not suffer if VW expanded its investments in Hefei. “We have created a good basis for Volkswagen in China so that they cannot let us down in the future,” said a high-ranking FAW insider. They are disappointed that Volkswagen is announcing such an important question without first coordinating it.

FAW and SAIC have been working with Volkswagen for decades and have helped the group to achieve its leading position in the People’s Republic. VW has a 50 percent stake in the joint venture with SAIC, and the Wolfsburg-based company with FAW holds 40 percent. Should Volkswagen expand its 75 percent stake in JAC-Anhui, the group would have to share less profit with the partner.

Experts assume that this will enable VW to accelerate its advance into electromobility. Upon request, the group informed Reuters that the portfolio of the joint venture with JAC was not in direct competition with the other partners, but was complementary. “The investment is a long-term strategic decision as we expect the total market in China to grow to around 30 million units by 2030,” the company said. This includes more than twelve million New Energy Vehicles (NEV). Last year around 1.4 million NEVs were sold in China. In the People’s Republic, purely battery-powered cars, plug-in hybrids and hydrogen vehicles are summarized under NEV.

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