JAC shares hit daily limit as Maextro V800 brake failures face joint government probe

• JAC rose 9.98% at the time of writing, after falling 22.37% from the open on October 8 to the close on October 15.
• The joint investigation has yet to release its findings, and Maextro has pledged full cooperation.

Anhui Jianghuai Automobile Group Corp (JAC, SSE: 600418) shares rose by their daily limit on Friday, after 3 Chinese government agencies announced a joint investigation into brake pedal bracket failures in the Maextro V800, a model it developed with Huawei.

JAC was up 9.98% in China's A-share market at the time of writing, holding at its daily upper limit. The stock had fallen 22.37% from the open on October 8 to the close on October 15.

China's Ministry of Industry and Information Technology said in a statement on the evening of October 15 that it had formed a joint investigation team with the Cyberspace Administration of China and the State Administration for Market Regulation to build on earlier investigative work and handle the matter "in accordance with laws and regulations."

The announcement addressed online reports of brake pedal bracket failures in the Maextro V800 and said updates would be released in a timely manner. It offered no conclusions on the cause of the failures or the testing methods.

Maextro subsequently said in a statement on Weibo that it would fully cooperate with the investigation team, safeguard consumers' legitimate rights and interests, and support the broader development of the new energy vehicle industry.

Richard Yu, chairman of Huawei's consumer business group, reposted Maextro's official statement on his personal WeChat Moments on Thursday and wrote in the comments, "Justice may be delayed, but it will never be absent," according to posts shared by several automotive bloggers.

Maextro, jointly developed by Huawei and JAC, is the highest-positioned brand under Huawei's HIMA (Harmony Intelligent Mobility Alliance). Yu has typically hosted launches of HIMA models over the past few years.

The joint investigation comes 1 week after automotive information platform Dongchedi released the test video, which sparked debate over vehicle safety and testing methods.

In the video released on October 8, Dongchedi said 3 V800 vehicles suffered brake pedal bracket failures between their second and fourth emergency braking attempts from 100 km/h to a standstill.

The testers said the failures prevented normal use of the brake pedal and that they brought the vehicles to a stop using the emergency braking function activated through the Park button.

Maextro responded the same day that no such failures had occurred in actual customer use since deliveries began, describing the conditions shown in the video as "non-standard, extreme test conditions."

The brand said its braking system had been developed and validated to requirements exceeding Chinese national and industry standards. It nevertheless pledged to optimize the component's design and offer owners of delivered vehicles a free upgrade option.

Maextro also pledged to systematically review and strengthen design validation, testing parameters and production quality management for the components. The joint investigation announcement did not comment on the brand's earlier explanation.

Launched on August 5, the V800 is positioned as a flagship MPV (multi-purpose vehicle). Its announced launch prices ranged from 766,000 yuan ($113,950) to 1,016,000 yuan, targeting the premium business transport market served by the Toyota Alphard and Lexus LM.