(Yicai Global) Nov. 25 -- Shares of Anhui Jianghuai Automobile Group Holdings’ listed unit rose after the firm said China’s anti-monopoly watchdog has approved its investment deal with Volkswagen.

Shares of Anhui Jianghuai Automobile Group [SHA: 600418], better known as JAC Motors, closed 1.2 percent higher today at CNY10.43 (USD159), after earlier jumping as much as 7.8 percent.

JAC’s parent company and Anhui province’s state-owned assets administrator, its actual controller, inked an investment agreement on May 29 by which the German carmaker will take a half stake in Anhui Jianghuai Automobile Group Holdings.

In addition, JAC and Volkswagen China Investment will boost investment in their joint venture JAC Volkswagen. JAC will invest CNY1.3 billion (USD197.5 million) and Volkswagen CNY5.2 billion, lifting the JV’s registered capital to CNY7.4 billion from CNY2 billion. JAC Motors will own 25 percent of the JV afterward, with Volkswagen owning the remainder.

Volkswagen will authorize the JV to produce vehicles under its major auto brands as well as new energy vehicles, JAC Motors said in a statement.

The JV will expand to produce 350,000 to 400,000 vehicles a year by 2029. As JAC’s stake will halve, the impact of the JV’s operation on JAC will also fall, it said, drawing investor attention to likely risks.

Volkswagen also has JVs with China FAW Group and SAIC Motor in China, and their sales rank first two among automakers.

JAC fell into the red in the first half, posting a net loss of CNY147 million (USD22.3 million) on a 7.6 percent dip in revenue to CNY24.9 billion (USD3.79 billion) from a year ago. Sales in slumped almost 11 percent to 209,400 vehicles.

Editor: Peter Thomas