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JAC Motor: VW talks continue at agreed pace

Anhui Jianghuai Automobile Group ( JAC Motor) said that talks with Volkswagen AG ( VW) are continuing at a mutually agreed pace but are “not yet at a completely successful stage” and the tie- up has not received final approval.

In September, JAC Motor signed a preliminary deal with VW to explore making electric vehicles in a new joint venture.

“We are continuing to make great efforts,” Chairman An Jin said of the talks. He declined to say when a final agreement might be made.

The joint venture would be VW’s third in China. Foreign automakers are required to form joint ventures to manufacture domestically and are generally limited to two passenger car ventures.

VW has said that it hopes to conclude talks in the first half of this year and to deliver its first car with JAC by 2018.

JAC also expects slower growth in China’s vehicle sales this year as the world’s largest auto market nears saturation in demand, An told Reuters on Monday.

China’s auto market grew an unexpectedly strong 13.7 percent last year thanks to a tax cut on small- engine vehicles. The growth rate is expected to fall as the policy is rolled back this year and eliminated in 2018.

“Because China already has 28 million vehicles ( in annual sales) and is extremely large, having another big increase is not very likely,” An said on the sidelines of China’s two sessions, where he is a delegate.

The annual meeting began on Sunday and ends March 15.

Global automakers General Motors and Toyota Motor Corp both reported falling sales in the first two months of 2017, while Nissan Motor Co posted single- digit growth. The automakers last month blamed the tax cut policy change and the Chinese New Year holidays for their weak sales.