Volkswagen Plans to Form Third Joint Venture Car Company in China to Develop New Energy
European automobile giant Volkswagen Group plans to form a third joint venture automobile company in China. The joint venture partner is the local listed automobile company Anhui Jianghuai Automobile Co., Ltd. The main business of the joint venture is the research and development, production and sales of new energy vehicle products, and will also explore innovative solutions for car travel. The two companies signed the above-mentioned cooperation memorandum on September 6, 2016 in Wolfsburg, Germany, where the Volkswagen Group is located.
The two parties agreed in the memorandum that each would hold 50% of the shares of the joint venture and subscribe for registered capital in the form of cash, technology and intangible assets.
The joint venture's vehicle models will be quickly introduced to the market based on existing mature platforms. In addition, both parties promised that future vehicle model platforms and technologies will also be invested in the joint venture.
The two parties will then set up a joint working group to complete the project feasibility report within three months and determine the investment scale and other details. They plan to complete the preparations for the new company and sign a formal agreement within 5 months.
Volkswagen Group is one of the largest automobile groups in the world. In 2015, it delivered 10.009 million vehicles to users, overtaking Toyota to return to the position of the largest automobile manufacturer. Its operating income reached 213.2 billion euros and it recorded a net profit of 128 billion euros.
China is Volkswagen's largest single market in the world. In 2015, it delivered 3.45 million vehicles in China, and its turnover in the Chinese market was nearly 600 billion yuan. Prior to this, he had formed two joint ventures with SAIC Group and FAW Group, namely SAIC Volkswagen Co., Ltd. and FAW-Volkswagen Co., Ltd. These two companies respectively occupy the first and second place in sales volume in China's passenger car market. Volkswagen is undoubtedly the leader in China's automobile market, and cars with the Volkswagen logo can be found all over China's streets.
Jianghuai Automobile is a local automobile manufacturer in China. It has no previous joint venture experience with multinational automobile giants. This automobile manufacturer in Anhui, China achieved operating income of 46.4 billion yuan in 2015 and recorded a net profit of 1.007 billion yuan. . In 2015, his car sales were 587,900 units, and the models he sold included passenger cars, buses and commercial vehicles. It should be pointed out that JAC sold 10,521 pure electric vehicles in 2015, a year-on-year increase of 332%, making it an important player in China's new energy vehicle market. Jianghuai Automobile has just completed a private placement, raising 4.5 billion yuan in funds to increase the production capacity of new energy vehicles. In the field of new energy vehicles, JAC has also reached a 10 billion yuan OEM agreement with NIO to OEM electric vehicles for NIO.
In 2015, China's new energy vehicle market experienced a "blowout" growth, with a year-on-year increase of 300%, and the number of new energy vehicles reached 350,000. In order to promote the development of new energy vehicles, the Chinese government has introduced radical measures. On the one hand, regulations require that the average fuel consumption of all models sold by all automakers must not exceed 5L in 2020, forcing automakers to produce new energy vehicles. In addition, a wide range of policy preferences are provided for new energy vehicle manufacturing, including subsidies, and there is no need to participate in license plate lottery and other strong stimulus policies. In terms of infrastructure, the central government, together with local governments, has intensively laid out charging piles. Everyone believes that China will become the largest single market for new energy vehicles, and taking the lead in China's new energy market means gaining the strategic commanding heights in the global market.
Volkswagen has become the No.1 player in the Chinese automobile market. The annual production and sales of traditional fuel vehicles have reached 3.5 million units. It is difficult to achieve breakthrough development. In 2015, sales even experienced negative year-on-year growth. It is a wise decision to establish a new energy vehicle joint venture in China.
In view of the fact that the previous cooperation activities of FAW Group and SAIC Group were lackluster in the field of new energy vehicles, compared with the huge communication costs with large state-owned enterprises, cooperation with JAC is obviously more pleasant. In addition, JAC Motors has outstanding performance in China's new energy vehicle market.
