Volkswagen heads for the Chinese electric car

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car market

The German group, according to what reported by Reuters, is in the process of creating a joint venture with the parent company of Jac motors

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(AFP)

The German group, according to what reported by Reuters, is in the process of creating a joint venture with the parent company of Jac motors

2 ‘of reading

Volkswagen is in the final stages to make its biggest investment in the Chinese electric car. This is what Reuters reported. The German group is preparing, with an outlay of at least 491 million dollars, to buy 50% of Jianghuai Automobile Group, which in turn owns 25.23% of JAC Motors. Not only. The deal, which could be announced on Friday, allows Volkswagen to also become the largest shareholder in the battery manufacturer Guoxuan High-tech. In particular, according to Reuters reports, the creation of the joint venture will allow Volkswagen to invest new money in its production capacity for electric vehicles.

The strategy
The move evidently reveals a twofold objective. The first concerns China. The Middle Empire, you know, is the largest four-wheeler market in the world. Of course: the blockade of production, due to the pandemic from Covid-19, caused sales to collapse. And yet, the country remains essential. Hence the desire of the German “car maker”, also in the face of the advancement of competitors such as Tesla (the first foreign manufacturer to have its own plant on site), to maintain the scepter of the largest non-Chinese vehicle manufacturer.

The second is to remain among the frontline companies on the electrification of vehicles. Also in this case several experts have underlined how the economic-health crisis can negatively affect the process in question. And yet, the belief is that in the medium to long term the transformation will continue anyway. Being among the protagonists of the electric car in a country that, before Covid-19, had set the target of 25% of sales of alternative energy cars by 2025 is a clear long-term strategic move.



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