Volkswagen AG is close to securing a joint venture with China’s Anhui Jianghuai Automobile Co. to increase the German firm’s footprint in China.
On Wednesday, the two companies signed a memorandum of understanding in Wolfsburg, Germany and plan on finalizing the deal and signing a formal agreement in the coming five months, reports Bloomberg.
In a statement to the Shanghai Stock Exchange, it was revealed that the deal will see Volkswagen and Jianghuai Auto each put up 50 per cent of the capital to “build a competitive portfolio of electric vehicles as fast as possible using existing mature platforms.”
Volkswagen chief executive Matthias Muller revealed that his company will invest over 4 billion euros into China in 2016 alone and within the next five years, will introduce 15 new-energy vehicles there.
“We believe this cooperation would not only benefit our two organizations, but would also be of great value to our customers, a sound environment and the Chinese society in general,” Muller said.
Volkswagen already has joint ventures with SAIC Motor Corp. and China FAW Group in the country that which requires overseas companies to set up businesses with local partners. Cross town rivals Daimler and BMW both have joint ventures to produce electric vehicles in China as well.
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