Electric-vehicle startup Aiways acquired a 50 stake in troubled domestic SUV maker Jiangling Holdings, paving the way to launch EV output.
Jiangling was relaunched last week as a 50-25-25 three-way partnership among Aiways, Jiangling Motors Group and Changan Automobile in Nanchang, capital of east China’s Jiangxi province.
Aiways paid 1.75 billion yuan ($248 million) for the stake, according to information disclosed by Changan, a company listed on the stock exchange in the south China city of Shenzhen.
The deal enables Aiways to obtain a license to produce EVs from China regulators and to use Jiangling’s plant to quickly ramp up output.
The agreement also allows Jiangling to better utilize factory capacity and ease its financial woes.
Aiways was established in 2017 by Fu Qiang, former China sales chief of Volvo Car, in Shangrao, another city in Jiangxi province. The startup unveiled its first full electric vehicle, the U5 compact crossover, in November.
Aiways plans to sell the U5 in domestic and European markets.
Jiangling Holdings was formed in Nanchang in 2004 as a 50-50 joint venture between Changan and Jiangling Motors Group, both of which are state-owned companies. It mainly builds and markets SUVs under the Landwind brand.
While it has annual production capacity of 150,000 vehicles, Jiangling Holdings only sold some 26,000 Landwind-badged SUVs in 2018 and recorded a loss of 820 million yuan for the year.
In March, Jiangling Motors was ordered by a Beijing court to stop the manufacture, marketing and sales of the Landwind X7 SUV, after a ruling found the vehicle copied features of the Range Rover Evoque.