Reporting " Asre Khodro" ,German automaker Audi AG inked a deal with SAIC Motor to build a joint venture, a move to consolidate its lead in the Chinese market.
A picture that has gone viral on the internet shows that the two automakers signed the agreement on Friday.
News portal Sina.com reported that the joint venture will be a 50:50 sales company, and SAIC Motor will produce Audi models as an OEM, with the first model expected to hit the market in April.
Both Audi China and Volkswagen China declined to comment on the issue at press time, saying details will not be released until late Monday.
Audi AG inks deal with SAIC Motor for joint venture
Audi built its first joint venture with China's FAW in 1991, which has since been localizing and selling Audi models.
Audi dealers, who were not informed of the deal in advance, are voicing their anger, demanding a response from the automaker about how to protect their interests.
A public letter from the Audi Dealers Association said some dealers are faced with high inventory and "the interests of Audi dealers will be further damaged if you set up a new sales company".
Audi has been the champion in China's premium car market, but it is losing steam compared to its competitors.
Statistics show that Audi sold 440,233 cars on the Chinese mainland and in Hong Kong in the first nine months of this year.
Despite keeping the lion's share, Audi posted merely 6.2 percent growth year-on-year. In comparison, BMW's sales rose 10.6 percent year-on-year in the same period to 379,000 units, and Mercedes-Ben sold 344,791 units in the same period, a 29.5 percent surge, year-on-year.