Anhui Jianghuai Automobile and Volkswagen Group sign joint venture agreement to produce new energy vehicles 2017-06-01

JV will contribute to development of China's auto industry and sustainable mobility and provide a new role model for Sino-German cooperation

Long-term partnership will develop, manufacture and sell NEVs and mobility services

New production plant and R&D center to be established

Beijing/Berlin, June 1, 2017. Anhui Jianghuai Automobile Co., Ltd. (JAC) and Volkswagen AG today formally signed a joint venture agreement in Berlin, Germany, in the presence of German Chancellor Angela Merkel and Chinese Premier Li Keqiang. Under the agreement, which represents a new milestone in Sino-German cooperation, the two partners will set up a 50:50 joint venture to develop, manufacture and sell new energy vehicles and mobility services.

In forming the joint venture, JAC and Volkswagen aim to promote the development of the new energy vehicle (NEV) industry and sustainable mobility, facilitate the Chinese auto industry's transformation and upgrading, and build their cooperation into a new role model for Sino-German cooperation in the industry.

The joint venture, with an initial term of 25 years, will utilize the technical and commercial advantages of the two parties in a fully-fledged cooperation that will cover pure electric vehicles for the competitive mass market. The agreement also covers development and production of NEV components, connectivity and big data services, as well as used car platform services, and includes all related business activities.

Once established, the new company and its management will begin detailed preparation for construction of a new NEV factory and a research and development center. This planning will include determination of location and production volumes.

"We are proud to have a strong partner at our side with JAC," said Prof. Dr. Jochem Heizmann, Member of the Board of Management of Volkswagen Aktiengesellschaft as well as President and CEO of Volkswagen Group China. "Volkswagen also greatly appreciates the support of the Chinese government in forming this partnership, which I'm confident will make a major contribution to the country's e-mobility future. This joint venture is a major step forward in Volkswagen's roll-out of a broad portfolio of new energy vehicles for the China market under TOGETHER – Strategy 2025."

Mr. An Jin, Chairman of the Anhui Jianghuai Automobile Co., Ltd, said, "JAC is very confident about the prospects of this joint venture with one of the world's leading auto companies. With strong leadership from the Chinese Government, China is at the forefront of the development and use of electric vehicles and we appreciate the government's strong support of our venture. We look forward to working with Volkswagen to bring the benefits of sustainable mobility to more Chinese people."

As part of "TOGETHER – Strategy 2025", Volkswagen is speeding up its efforts for sustainable mobility. The Group will be launching a broad-based initiative for e-mobility and will be prepared to deliver 400,000 NEVs in 2020 in the Chinese market, rising to 1.5 million NEVs in 2025.

Based on the Made in China 2025, Automotive Industry Mid to Long Term Development Plan and the rigid mid- to long-term demands for energy conservation and emissions reductions, JAC will proactively pursue the development of NEVs, a major emerging industry of strategic importance. JAC clearly advocates NEVs to be strategic to its core business, and expects NEV sales to account for over 20% of gross sales by 2020, reaching to more than 30% by 2025.