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Executives of Audi and SAIC formally signed the “cooperation
framework agreement” on Friday, and the German car maker is
expected to announce the move on Monday.
The two sides agreed to continue to talk and try to nail down
details of a deal for Audi to produce cars in China with SAIC,
the person said.
Neither SAIC nor Audi could be reached immediately for comment.
The move, if finalized, would allow Audi, a unit of Volkswagen
AG <VOWG_p.DE>, to significantly expand its ability to produce
cars in China, the world’s biggest auto market.
Audi currently produces all its cars in China jointly with FAW
Group Corp [SASACJ.UL] in the southern city of Foshan, near
Guangzhou, and in the northeastern city of Changchun. Both SAIC
and FAW are Volkswagen’s joint venture partners.
Research firm Bernstein said in a note published on Wednesday
that “the implications of such a move (Audi producing cars in
China with SAIC) – if realized – would be profound.” It would
provide Audi and its parent Volkswagen a way to reap more profit
from China, it said.
In Foshan, Audi produces the A3 compact car and its variants,
while in Changchun the German luxury brand assembles the
long-wheel-base versions of the A4 and A6 sedans, as well as Q3
and Q5 crossover SUV models, among others.
Audi is expected to launch in China a plug-in electric hybrid
version of the A6 L, a long-wheel-base version of the A6.
(Reporting By Norihiko Shirouzu; Editing by Muralikumar
Anantharaman)
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