Volkswagen Group, Volkswagen China and Anhui Jianghuai Automobile (JAC) have signed a Memorandum of Understanding (MoU) that will explore the potential for jointly developing new multi-functional vehicles (CVs).

The new cooperation will expand synergies between the two companies. In June 2017, the companies had agreed to set up a joint venture to manufacture battery electric vehicles (EVs) for the China’s passenger vehicle market.

Prof. Dr. Jochem Heizmann, Member of the Board of Management of Volkswagen Group as well as president and CEO of Volkswagen Group China, said, “Volkswagen welcomes this opportunity to pursue further cooperation with JAC. Both groups have complementary strengths in the multi-functional vehicle field. JAC is an established brand in the Chinese market with a strong track record of producing multi-functional vehicles that are popular with consumers. Volkswagen has a long heritage in producing versatile vehicles with advanced technology.”

The Volkswagen Commercial Vehicles (VWCV) brand will take the lead role on behalf of Volkswagen Group and will be JAC’s partner in the JV. Joern Hasenfuss, Member of the Board of Management Volkswagen Commercial Vehicles brand, said: “Volkswagen has a multi-functional vehicle heritage going back nearly seven decades. Also in China, Volkswagen Commercial Vehicles has attracted a growing band of loyal customers. But there are more chances. With our partner JAC we want to merge experience and knowhow of both companies for the benefit of the Chinese market.”

An Jin, chairman, Anhui Jianghuai Automobile (JAC) said: “JAC is pleased to further expand our relationship with Volkswagen. JAC has rich product series, technology reserve and market base in multi functional vehicle area. We see great potential for mutual benefit in an area where both companies have strong advantages. Together, we can greatly enhance the MFV market, bringing consumers excellent products and more choice.”

According to the statement released by JAC, the partners will actively explore a full range of cooperation including advances in MFV design, technology, product quality through R&D as well as sales. It will cover both internal combustion engine and new energy models.

As per the MoU, the new venture will be set-up in Hefei, Anhui province where JAC is based and both the state will be held in a 50-50 ratio between JAC and Volkswagen Group.

Volkswagen Group is seeing a growing opportunity from the Chinese market, in fact the company on November 17, 2017 had announced plans to introduce 20 locally produced NEVs (new energy vehicles) in the country, taking its total count to 40 between 2020 and 2025. Along with the announcement of a new JV with JAC its third vehicle manufacturing plant in China. The venture will help Volkswagen reach its goal of setting up a broad and customer-oriented portfolio of pure battery cars by producing vehicles for the competitive mass market. The first model is expected to hit the market in 2018.