VW ties up with SAIC to build, sell Audi cars

VW ties up with SAIC to build, sell Audi cars

Volkswagen Group, anxious to defend Audi's market share in China, signed a tentative deal with SAIC Motor Corp. to build Audi cars at their joint venture.

Under an agreement signed Friday at VW's headquarters in Wolfsburg, Germany, SAIC Volkswagen Automotive Co. will produce and sell Audi models, SAIC in a statement.

Additional details about Audi cars to be built by the joint venture were not released.

Shanghai-based SAIC Volkswagen is a 50-50 partnership established in 1983. It produces Volkswagen- and Skoda-brand cars.

Since 2003, Volkswagen's other joint venture, FAW-Volkswagen Automobile Co. has produced Audi vehicles in China.

The FAW-VW partnership was formed in 1991 in the northeast China city of Changchun has built the Audi brand into China's leading luxury marque.

The FAW-VW venture also plans to establish a niche for Audi in China's fast-growing market for electric cars and plug-in hybrids. Over the next five years, FAW-VW will launch output of five plug-in hybrid and electric models, Audi said in a statement on Monday.

Audi will also form a new joint venture company with FAW that will be based in Beijing to focus on mobility and digital services, according to the statement. Even with the EV initiative, Audi may have trouble defending its status as China's leading luxury brand as BMW and Mercedes-Benz gain ground.

In the first nine months of this year, Audi's China sales increased 6.2 percent to 440,233 vehicles. By contrast, BMW deliveries rose 10 percent to 330,000, and Mercedes sales surged nearly 30 percent to 344,791 vehicles.