Audi, SAIC Motor sign agreement to construct Audi cars in China

Audi and China’s SAIC Motor signs a contract

The contract will likely lead the way for the German high-end automaker to produce automobiles in China with SAIC, an individual knowledgeable about the matter informed Reuters.

Executives of Audi and SAIC officially signed the cooperation framework contract on Friday, and the German automaker is expected to announce the action on Monday.

The two sides consented to continue to talk and aim to pin down information of an offer for Audi to produce vehicles in China with SAIC Motor, the individual stated.

SAIC and Audi couldn’t be reached immediately for comment.

The move, if settled, would enable Audi to significantly expand its capability to produce vehicles in China, the world’s most significant automobile market.

Audi presently produces all its vehicles in China jointly with FAW Group in the southern city of Foshan, located near Guangzhou, and in the northeastern city of Changchun. SAIC and FAW are Volkswagen’s joint venture partners.

Research firm Bernstein stated in a note released on Wednesday that “the implications of such a move, if realized, would be extensive.” It would offer Audi and its parent Volkswagen a method to gain more money from China, it said.

In Foshan, Audi manufactures the A3 compact car and its versions, while in Changchun the automaker assembles the long-wheel-base versions of the A4 and A6 sedans, along with Q3 and Q5 crossover SUV models, to name a few.

Audi is expected to introduce in China a plug-in electrical hybrid variation of the A6 L, a long-wheel-base variation of the A6.