VW plans to increase its investment in its majority-owned Chinese joint venture company, Volkswagen Anhui.
Reuters says that VW is expanding its business in China to regain lost ground there. Moreover, it is exploring options to work with local companies as it attempts to hasten the shift to electrification.
In a filing to the stock exchange, JAC Motors, one of three Chinese JV partners with Volkswagen, said both sides will boost their investment. That will take the JV company’s registered capital to 13.9 billion yuan, up from 7.4 billion yuan.
JAC Motors will contribute 1.6 billion yuan while Volkswagen’s China division will contribute 4.9 billion yuan. Their holdings in the JV will remain unchanged at 25 and 75 per cent, respectively.
Volkswagen revealed plans late last year to develop a new platform for entry-level electric vehicles in China. It also wants to use more local components to lower costs. VW made a deal last year with Chinese EV start up, Xpeng, to boost the German’s EV line-up.
VW signed a 50:50 agreement in 2017 with JAC Motors, and three years later secured a controlling 75 per cent stake in the JV company. That was after Beijing relaxed rules that had previously prevented foreign firms from owning majority stakes in local auto firms.
The Chinese VW/JAC plant has been producing Cupra Tavascan EVs for exports to Europe and other countries.
VW also holds a 50 per cent stake in its JV with SAIC Motor Corp while its JV with China FAW Group is 60 per cent controlled by FAW.
