Volkswagen is important player in Chinese automotive market. It sold about 3.14 million cars in 2017 under various brand names such as Volkswagen, Audi, SEAT, Škoda, Bentley, and Lamborghini. In the present COVID-19 situation where there are talks (rumours) of companies moving their manufacturing base from China to elsewhere, the investment from Volkswagen will go a long way in strengthening the relations between Volkswagen and Chinese government.
Last week(28 May 2020), Volkswagen issued press release, saying it is increasing its stake in JAC Volkswagen from 50 to 75 percent, by acquisition of 50% stakes for Euro 1 billion, in the parent company of JAC- Anhui Jianghuai Automobile Co., Ltd. JAC is a Chinese state-owned automobile established in 1964 and has been a commercial vehicle manufacturer till 1990s. Letters of intent were co-signed by Volkswagen (China) Investment Co. Ltd. and the government of Anhui province, to initiate the process of sated transfer. Its is expected that the deal will be closed by the end of the year 2020. JAC Volkswagen, founded in 2017, is into development and production of NEVs(Neighbourhood Electric Vehicle). As per the plan for its portfolio expansion 5 additional BEV models will be added by 2025.
Volkswagen is also acquiring 26 percent stake in battery manufacturer Gotion High-Tech Co., Ltd. for around Euro 1 billion, and eventually becoming the company’s largest shareholder.