(Yicai Global) Dec. 24 -- Two Chinese partners of the Audi car-making unit under German auto giant Volkswagen Group recently laid to rest a disagreement over sales channels. This settling dust now clears the way for Audi’s cooperation with SAIC Group to make cars in China and debut the first Audi-branded vehicles in the country in early 2022.

SAIC penned its memorandum of understanding with VW at the end of 2016 to set up a JV to produce Audi-branded cars, but the sales channels of FAW-Volkswagen Audi openly opposed this move, worried that the new JV plant might harm their interests.

SAIC Motor, China FAW and Audi have now struck an agreement on the sales avenues for the forthcoming SAIC-Audi products, SAIC Volkswagen, the joint venture between Volkswagen and Shanghai’s SAIC Motor, said in a statement yesterday. Sales and after-sales services of all models made by FAW-Volkswagen Audi and SAIC Audi will ensue in future via the existing network of Audi stakeholders, which are the dealers of FAW-Volkswagen Audi, it added.

SAIC Audi’s first cars will be delivered in early 2022, with the first model reportedly to be styled the Audi A7L.

Moving Metal

“We are going to sell our products using the network set up by the FAW-Audi dealers, though we may not use the same dealerships or the same showrooms," an SAIC Volkswagen insider told Yicai Global, adding, “SAIC Audi and FAW Audi will, however, share their after-sales service.”

The agreement will accelerate Audi-branded vehicle sales in China, it is hoped. The high-end marque sold nearly 620,000 cars in China in the first 11 months in about 4 percent annual growth that topped the charts for luxury car sales, but only outnumbered runner-up Mercedes-Benz under German carmaker Daimler by fewer than 40,000 units.

The decision on sales channels and modality will benefit SAIC Volkswagen’s introduction and positioning of new products and give the JV an edge in its rivalry with FAW Volkswagen.

The partnership between Audi, along with its parent VW and FAW in northern China, has gone on for years. The brand has hitherto been disabled from raking in high profits from its JV with FAW because of shareholding restrictions, however, a factor that also explains Audi’s quest for a new partner in SAIC Motor. Collaborating with SAIC will also benefit Audi’s growth in the south China market.

Editors: Tang Shihua, Ben Armour, Xiao Yi