Volkswagen AG (VOWG_p.DE) is exploring a potential joint venture with Chinese automaker Anhui Jianghuai Automobile (JAC Motor) (600418.SS), Chinese media reported on Wednesday.
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Volkswagen said it had signed a memorandum of understanding Tuesday with Jianghuai to evaluate the possibility of joining forces.
Anhui Jianghuai Automobile Co., Ltd (JAC) is a comprehensive automobile company encompassing R&D, production, sales and service and other businesses related to the production and sale of commercial and passenger vehicles, including powertrains.
The goal is to create all-electric vehicles for sale in China, the world’s biggest auto market and also home to some of the most polluted cities.
Christoph Ludewig, a spokesman for Volkswagen, said last week the automaker was still in talks with Jianghuai.
“You may get a better agreement from a company who values your technology more”.
“Jianghuai already is quite a player in China”, said Chow.
General Motors Co. plans to launch about 10 alternative-energy cars with its Chinese partners, SAIC and Wuling, by 2020.
Volkswagen is locked in a dead heat with USA automaker General Motors for the title of largest automaker in China, the world’s biggest auto market, with GM’s primary joint ventures slightly edging out VW’s to sell the most cars in the market previous year, according to automaker association data.
Wednesday’s announcement follows Volkswagen’s purchase of a 16.6% stake in US -based truck maker Navistar International Corp. this week.
JAC, based in Hefei in east China’s Anhui province, is a state-owned auto, truck and bus maker with sales outlets across China. It also builds conventional and electric cars.
They aim to sign an agreement within five months.
JAC chairman An Jin said the firm was looking forward to “a full-scale cooperation” with Volkswagen “to provide Chinese consumers with highly cost-effective battery electric vehicle products”. The first cars are due out next year.
Jianghuai’s total sales of cars, trucks and SUVs in the first seven months of 2016 rose 11.4 percent over a year earlier to 370,000 units, according to the China Association of Automobile Manufacturers, an industry group.
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Volkswagen’s current strategy review calls for accelerating development of electric vehicles. The Group will be launching a broad-based initiative for electro-mobility and intends to develop more than 30 new, purely battery-powered electric vehicles (BEVs) over the next ten years.
