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Following Volkswagen's establishment of FAW-Volkswagen and SAIC-Volkswagen joint ventures in China, Volkswagen has previously formed a new joint venture with Jianghuai Automobile. With Jianghuai Volkswagen increasing capital and changing the stock ratio, there has been the latest progress. On November 2, Jianghuai Automobile issued a notice saying that matters related to the capital increase of Jianghuai Volkswagen have been put on record by the Development and Reform Commission of Anhui Province. This also means that the domestic capital increase has entered the final stage of implementation.

According to the plan, JAC Volkswagen's total registered capital will be increased to 7.356 billion yuan. The original shareholding structure of JAC Volkswagen at 50:50 will be changed to Volkswagen China Investment to increase its equity by 75% with a registered capital of 5.517 billion yuan, while JAC shares will be reduced to 25% with a registered capital of 1.839 billion yuan. At the same time, the management of the company will be dominated by Volkswagen China Investment, that is, Volkswagen.

It is understood that in May this year, Anhui SASAC, Volkswagen China Investment, and Jiangqi Holdings jointly signed a "letter of intent on increasing Capital to Anhui Jianghuai Automobile Group holding Co., Ltd." Volkswagen China will acquire a 50% stake in Jiangqi Holdings by means of capital increase. At the same time as taking a stake in Jianghuai Automobile Group, Volkswagen also announced that it would increase its stake in JAC Volkswagen to 75%, giving Volkswagen a controlling stake in the joint venture.

On June 11, the three parties formally signed the Investment Agreement on Anhui Jianghuai Automobile Group Holdings Co., Ltd., which stipulated that Volkswagen China contributed 2.383 billion yuan to acquire a 50% stake in Jianghuai Automobile Holdings.

In order to promote the product layout of Jianghuai Volkswagen, Jianghuai Motors also signed the Product portfolio Framework Agreement with Volkswagen China, which stipulates that Volkswagen becomes a 75% shareholder in the joint venture company. 4-5 Volkswagen Group brand products will be awarded to the joint venture company, and the planned products will be based on its pure electric platform.

Previously, there were rumors that Volkswagen would introduce the Seattle brand to Jianghuai Volkswagen. Seattle is a slightly lower car brand in foreign markets. However, the plan has not yet been landed for a variety of reasons.

At the same time, the portfolio Framework Agreement also involves a production plan with an annual production capacity of 350000 vehicles, which is expected to produce 20-250000 vehicles in 2025 and 35-400000 vehicles in 2029, with total revenue expected to reach 30 billion yuan in 2025 and 50 billion yuan in 2029.

Jianghuai Volkswagen, which was founded in 2017, released the Sihao brand in April 2018 and the first model E20x on September 28, 2019. However, the poor performance of the market has led to a decline in model sales, with monthly sales of only 100 vehicles.

Volkswagen believes that after Jianghuai Volkswagen introduces Volkswagen products, it will complement and coordinate with FAW-Volkswagen and SAIC-Volkswagen, the other two Volkswagen joint ventures in China. At present, FAW-Volkswagen and SAIC-Volkswagen are also gradually expanding their layout in the new energy electric market.

However, some industry insiders analyzed that as Volkswagen acquired the main controlling stake of JAC Volkswagen, more models were put into production at the factory. Volkswagen can form restrictions on SAIC Volkswagen and FAW-Volkswagen "North-South Volkswagen" through the third joint venture JAC-Volkswagen. Of course, this kind of adjustment also has more advantages than disadvantages to Jianghuai, its passenger car product line will be richer, and sales are expected to come up.

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