Nio unit, state owned firm wins bid for JAC assets
Anhui Jianghuai Automobile (JAC) announced Tuesday that Nio’s (NIO) Anhui division and a state-owned entity under the Hefei government of China successfully secured assets from JAC valued at a total of 4.58 billion yuan ($641.2 million).
Nio (NYSE:NIO) confirmed the deal in an exchange filing.
Under this agreement, Nio will acquire specific fixed assets and equipment from two JAC factories for 3.16 billion yuan. Additionally, Hefei Hengchuang Intelligent Technology, a state-owned developer specializing in industrial parks, will purchase the buildings and land use rights of one of the plants for 1.42 billion yuan, as mentioned in the statement.
Back in October, JAC initiated the sale of assets located at the F1 and F2 plants, which have been utilized by Nio for its EV production.
Nio had earlier established that they independently design the production lines and develop manufacturing technologies within these facilities.
While a joint venture between Nio and JAC has overseen the operation and management of the plants since 2019, JAC has primarily handled the recruitment and management of assembly workers.
The Chinese state planner has been imposing limitations on the expansion of production capacity within the automotive sector and has been cautious about permitting new entrants into an already saturated market.
In 2018, regulators granted Nio permission to manufacture and market EVs in China through its partnership with JAC. Within this arrangement, Nio paid JAC commission fees for each car it manufactured.
According to data from the China Passenger Car Association, Nio secured the ninth position in terms of sales of EVs and plug-in hybrids in China, having sold 126,067 units during the first 10 months of the year.
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