Anhui Jianghuai Automobile Says Nio Unit, State-Owned Firm Win Bid for Assets

SHANGHAI/BEIJING (Reuters) – Anhui Jianghuai Automobile (JAC) said on Tuesday that electric vehicle maker Nio’s Anhui unit and a state-owned company of China’s Hefei government won a bid for its assets worth a combined 4.58 billion yuan ($641.2 million).

Nio will take some fixed assets and equipment at two factories from JAC at a price of 3.16 billion yuan while Hefei Hengchuang Intelligent Technology, a state-owned industry park developer, will buy the buildings and land use rights of one of the plants for 1.42 billion yuan, the statement added.

Nio confirmed the deal in an exchange filing. Hengchuang did not immediately reply to a request for comment.

In October, JAC put up for sale the assets at the two plants, known as F1 plant and F2 plant where Nio has been producing its EVs.

Nio had previously said it independently designed the production lines and developed the manufacturing technologies at the factories while a joint venture with JAC has been operating and managing the plants since 2019, with JAC mainly in charge of hiring assembly workers.

China’s state planner has been restricting the growth of production capacity in the auto industry and is reluctant to approve new players to join the overcrowded market.

Regulators allowed Nio to produce and sell EVs in China via the collaboration with JAC in 2018 through which Nio paid JAC commission fees on each car it produced.

Nio ranked ninth in terms of sales of EVs and plug-in hybrids in the first 10 months in China with 126,067 units, according to data from China Passenger Car Association.

($1 = 7.1415 Chinese yuan renminbi)

(Reporting by Zhang Yan, Brenda Goh and Beijing newsroom; Editing by Jacqueline Wong and Miral Fahmy)

Copyright 2023 Thomson Reuters.