Shanghai (ZXZC)- Both JAC Motors and Volkswagen (China) Investment Co., Ltd. (called “VW China” for short) have finished subscribing for the equity stake newly issued by JAC Volkswagen, which made the registered capital of the joint venture surge to 7.356 billion yuan ($1.055 billion) from 2 billion yuan ($286,730,200), JAC Motors said on July 22.

Upon completion of the transaction, VW China sees the share it holds in JAC Volkswagen increase to 75% from 50%.

(Photo source: JAC Volkswagen)

The National Development and Reform Commission announced in a statement in 2018 that China will scrap foreign ownership limits on new energy vehicle manufacturers in 2018, followed by commercial vehicle makers in 2020 and passenger vehicle companies in 2022.

The policy has to-day been implemented as scheduled. Prior to Volkswagen, Hyundai has obtained 100% stake in Sichuan Hyundai Motor Co., Ltd, making the latter the first commercial vehicle (CV) manufacturer in China that is wholly owned by a foreigner company.

According to an announcement signed by JAC Motor and VW China on June 11, Volkswagen Group will authorize JAC Volkswagen to produce four to five BEV models after it acquires more equity in the joint venture. Besides, a manufacturing plant that is able to output vehicles at 60 units per hour is set to work at full capacity between 2025 and 2030.

The vehicle plant is expected to increase its annual capacity to 350,000-400,000 units in 2029 from 200,000-250,000 units in 2025.

While announcing the close of capital increase in JAC Volkswagen, JAC Motors said it intends to apply for an entrusted loan worth 1.29 billion yuan ($184,940,979) with a validity period of 2 years to its parent company Anhui Jianghuai Automobile Group Holdings Limited. The loan will be used to promote the company's development and meet the company's needs of day-to-day management.