Foreigners were previously prevented from controlling any Chinese carmaker or joint venture. Beijing last year removed such caps for firms making fully electric and plug-in hybrid vehicles. Limits on commercial vehicles makers ease in 2020 and by 2022 for the wider car market.
VW, which has a market capitalisation of €75bn (roughly R1.1-trillion) is not currently a shareholder in Shanghai-listed JAC, which has a market value of about $1.7bn (roughly R23.8bn) according to Refinitiv data.
The German car giant's plans are at an early stage but it is keen to take a big stake, said three of the people. Two of them said it will seek to buy shares from JAC's major shareholders, which are mainly state-backed firms owning over 40%, showed Refinitiv data.
JAC's parent Anhui Jianghuai Automobile Group Holding holds a 24% stake and is fully controlled by the local government.
When contacted by Reuters, VW said: "We are carefully watching what the implications are for our business and for our joint venture partners. In this regard we will explore all possible options together with all stakeholders to secure long-term success in China."
JAC and its parent didn't respond to requests for comment. Goldman declined to comment. The people declined to be identified as the matter was confidential.