Secretary of the board of directors of Jianghuai Automobile Wang Min stated on October 9 that “JAC does not want to become a foundry and the joint venture must bring new technologies.”

September 28 JAC announced that the company had signed a framework agreement with Navistar and Caterpillar in the United States to establish a joint venture automobile company in Hefei to produce medium and heavy trucks and components. According to the joint venture agreement, Caterpillar United Navistar will hold 50% of the shares and the remaining 50% will be held by JAC. If foreign investors merge equity, Chinese companies are likely to face the potential risk of losing their largest shareholder.

The real technology transfer in the JAC heavy truck joint venture project will take place in the newly developed brand because the newly developed heavy truck will sell overseas markets. "Once new products are sold in large quantities in overseas markets, then JAC will undoubtedly become a foundry that is under a joint venture. Its plan to introduce core technologies will be difficult to achieve."

Industry sources pointed out that there are many hidden dangers in this joint venture project. On the one hand, according to the current M&A policy, 50% of foreign-invested joint venture projects will encounter greater resistance in approval. On the other hand, the state hopes that foreign investors will transfer technology and will not encourage OEM production. If there are signs of OEM production, the relevant national authorities will consider it carefully. All the above questions will bring resistance to the joint venture of Jianghuai Automobile.

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