(Yicai Global) July 22 -- Shares of Jianghuai Automobile climbed after the Chinese carmaker said that Volkswagen will pay even more than expected to become the second foreign auto firm to take control of its China joint venture.

JAC Motors's stock price [SHA: 600418] rose 4.4 percent to CNY10.46 (USD1.50) this morning.

Volkswagen China Investment will pay CNY5.2 billion (USD746.1 million) for JAC Volkswagen Automotive's newly issued shares to have 75 percent of the JV's equity, the Anhui province-based firm said in a statement yesterday. That is about CNY700 million (USD100.4 million) more than what the Chinese firm had suggested on June 11.

JAC will put in CNY1.3 billion to have the remainder. In June, it had offered CNY839 million to boost the JV's registered capital to about CNY7.4 billion from CNY2 billion. The pair expects to reach a binding agreement by the end of this month.

Established in December 2017, JAC Volkswagen became the Wolfsburg-based automaker's third Chinese JV. The two partners poured CNY1 billion into it, with a 50:50 shareholding ratio.

Volkswagen has been looking to advance its all-electric vehicle strategy in China by upping its stake after the country removed its foreign ownership limits for carmakers in 2018.

The money should go into market expansion. The JV should raise its production scale to 400,000 vehicles by 2029, according to an earlier announcement. The total investment should reach EUR1 billion (USD1.1 billion).

But the JV has remained unprofitable. Last year, JAC Volkswagen made a loss of CNY364 million while logging CNY228 million in revenue.

Editor: Emmi Laine