Volkswagen considers buying big stake in China
Volkswagen AG is considering the purchase of a big stake in its Chinese electric vehicle joint venture partner JAC Motors and has tapped Goldman Sachs as an adviser on the plan, people with direct knowledge of the matter said.
Reuters reported that the move by VW, the largest foreign automaker in China, to buy into Anhui Jianghuai Automobile Group (JAC Motors) is the latest step by foreign automakers to increase their stakes in their Chinese joint venture partners since Beijing relaxed ownership rules last year in the world’s biggest car market.
The German car giant’s plans are at an early stage but it is keen to take a big stake, said three of the people. Two of them said it will seek to buy shares from JAC’s major shareholders, which are mainly state-backed firms owning over 40 percent, showed Refinitiv data.
Meanwhile, Wolfsburg-based VW, which delivered 4.21 million cars in mainland China and Hong Kong last year, has operated in China for decades and, besides JAC, has joint ventures with state-owned FAW Group and SAIC Motor.
China last month toughened up its EV subsidies amid concerns that generous local government support designed to produce regional industry champions has contributed to overcapacity and inefficiency.