Not long ago, JAC Motors issued an announcement stating that it would establish a joint venture with NIO in Hefei. The newly established company was named "Jianglai Advanced Manufacturing Technology (Anhui) Co., Ltd.". JAC and NIO hold 51% and 49% of the shares respectively, and JAC is the actual controlling party of the company.

As we all know, JAC and NIO have a long history of cooperation. As early as 2017 when NIO's first car was launched, JAC had already been producing cars for NIO.

Therefore, NIO and JAC can be regarded as an old partner. So, on the basis of the existing cooperation in manufacturing, why did the two parties set up the "Jianglai Company"? What is the purpose?

First, it embraced Volkswagen, then it formed a marriage with Weilai. What is JAC trying to do with such a big deal?

In fact, before cooperating with NIO, JAC Motors had already cooperated with Volkswagen. Why does JAC Motors choose to "band together" so frequently?

We know that since 2019, China's auto market has seen a decline in growth for the first time. Moreover, under the influence of the epidemic, major automakers are having a hard time, especially second-tier domestic brands, which are in a bleak state. Automakers such as Zotye, Lifan, and Huatai have even withdrawn from the market. Against this backdrop, JAC Motors, as a second-tier domestic brand, is also facing problems such as declining sales and performance.

According to the financial reports of JAC Motors in the past three years, the loss of JAC Motors in 2018 was as high as 786 million yuan! As a result, JAC Motors must feel a lot of pressure, so it is possible to reverse the decline by holding on to the right "thigh" in time. Therefore, JAC Motors also happily let Volkswagen acquire 50% of its shares, which also put JAC on the road of "Volkswagen".

At the same time, under the general trend of automobile intelligence, JAC Motors chose to cooperate with NIO for the development of its own intelligent business. JAC executives said that "Jianglai Company" will focus on automobile intelligence.

As a leading car company among new car-making forces, NIO has outstanding performance in intelligent system configurations such as intelligent assisted driving, car-machine intelligent interconnection system (NOMI Mate 2.0 system), and voice interaction functions, and its intelligent technology level is also recognized by the market. Therefore, JAC Motors' cooperation with NIO will certainly be able to leverage NIO's experience and technical support in intelligentization to develop its own intelligent business and enhance its product competitiveness.

In addition, JAC's new energy vehicle models, especially commercial new energy vehicle models, have good market competitiveness. If they can be combined with the brand power of NIO, it will surely be of great help in increasing the sales of new energy vehicle models.

The joint venture is a “good show”, why is NIO willing to set the stage and let JAC perform?

However, there is another question worth exploring, that is, there are many domestic independent brand car companies with stronger strength than JAC, such as Geely Automobile, Great Wall Motor, Chery Automobile, etc. Why did NIO choose JAC? There is an important reason. NIO's move is a way of gratitude, in order to repay Hefei's previous timely assistance to it.

On February 25 last year, when NIO was in deep financial crisis, Hefei City took timely action and injected 14 billion yuan into NIO to solve its urgent needs.

JAC Motors is a subsidiary of Hefei State-owned Assets Supervision and Administration Commission, and Hefei has great advantages in the new energy industry. In addition, JAC is its old partner. With multiple factors combined, it is natural for NIO to join hands with JAC. Moreover, through the joint venture with JAC, the relationship between NIO and Hefei will be more solid, which will also be of great benefit to its own development.

In addition to policy considerations, NIO chose to cooperate with JAC Motors in order to further strengthen itself.

In the eyes of the majority of consumers, NIO is a mid-to-high-end new energy brand, and most people who buy NIO have a certain level of economic strength; in other words, NIO is not a civilian brand.

One of the important purposes of NIO's cooperation with JAC is to create a second brand suitable for home use to meet the needs of domestic consumers and further expand its market share. NIO executives also said that another purpose of establishing a joint venture is probably to manage NIO's second phase factory and expand the production of NIO cars.

As it moves forward by trial and error, will Jianglai follow in the footsteps of GAC Aion?

The joint venture between NIO and JAC looks great, but can it really go as smoothly as the two companies wish?

It is not difficult to find that neither NIO executives nor JAC executives have clearly pointed out the development direction of the new company. In other words, the new company is still in business exploration mode and has no clear plan.

When we think about the previous joint venture between NIO, Changan Automobile and GAC New Energy, it was all “much ado about nothing”, with no substantial progress until today. The sales of the joint venture product GAC NIO 007 were also dismal.

It can be said that both Changan Automobile and GAC New Energy are more powerful than JAC Motors. Even these two first-tier independent brand car companies have not achieved the expected success. So, will the joint venture between JAC Motors and NIO have a bright future?

From JAC's own perspective, being an OEM for NIO cannot bring NIO high-quality customer service, sales channels, and the strong stickiness and good reputation of the car owner group. It is unknown whether it will help itself.

In addition, JAC Motors has encountered certain difficulties in its operations in recent years, and its capital chain is no longer as good as before. Therefore, if JAC wants to operate and manage the new company on its own, it probably does not have much spare energy to support the operation and development of the new company.

At present, the joint venture between JAC and NIO has caused JAC's stock price to rise continuously, and has also brought new and strong support to technology and brand; for NIO, business development has become more diversified, and its destiny will be further closely tied to Hefei.

However, the rise in JAC's stock price is only temporary. If the joint venture between the two parties does not play a substantial role, it is very likely that the bubble will burst in the future and the stock price will plummet. It is also worth pointing out that whether the joint venture between the two parties is successful remains to be tested by the market. If Chinese consumers are not interested in the joint venture products of the two parties, then the "Jianglai Company" of NIO and JAC may face the same bleak future as GAC NIO.

As a winner of Toutiao's Qingyun Plan and Baijiahao's Bai+ Plan, the 2019 Baidu Digital Author of the Year, the Baijiahao's Most Popular Author in the Technology Field, the 2019 Sogou Technology and Culture Author, and the 2021 Baijiahao Quarterly Influential Creator, he has won many awards, including the 2013 Sohu Best Industry Media Person, the 2015 China New Media Entrepreneurship Competition Beijing Third Place, the 2015 Guangmang Experience Award, the 2015 China New Media Entrepreneurship Competition Finals Third Place, and the 2018 Baidu Dynamic Annual Powerful Celebrity.