(Yicai Global) April 15 -- A joint venture between China's SAIC Motor and Volkswagen Group will introduce an agency sales model in China to market their new product category, Audi cars.

SAIC Volkswagen Automotive's initial plan is to build about 200 Audi City showrooms in about 80 Chinese cities, Audi China President Werner Paul Eichhorn told Yicai Global in an interview on April 13 ahead of the Shanghai Auto Show that begins on April 23.

In the agency model, dealers make money by taking commissions while avoiding inventory risks as the car manufacturer keeps the right to sell the products, Eichhorn explained.

In late 2016, the two companies penned a memorandum of understanding to set up a JV to make Audi cars in China. The first model, the Audi A7L sedan, is expected to start deliveries in early 2022 with an annual output of 60,000 units.

The JV is looking to make products tailored for Chinese consumers. The company will exhibit two models at the Shanghai Auto Show, a C-class sedan and a concept car built on the MEB platform, developed by Germany's Volkswagen.

Audi Boom

These are not the first locally produced Audis in China. SAIC Volkswagen will provide more Audi products in different market segments in China and those will not compete with any existing products made by Volkswagen's other Chinese JV, FAW-Volkswagen Automobile, said the executive.

Audis are becoming more numerous on the streets of China. Volkswagen's plan is to launch 30 new or redesigned Audi models in China this year, including imported ones, and to have 12 locally produced models in total, including those made by FAW-Volkswagen, said the executive. The first quarter marked the first time that Audi sales exceeded 200,000 units in China, driven by imported vehicles.

The lineup of imported Audis will be updated by December 2022, with a focus on sports models, Eichhorn added.

Editor: Emmi Laine, Xiao Yi