Volkswagen Group and its Chinese joint venture partner, SAIC Motor, plan to invest 4.13 billion yuan ($590 million) to revamp their car plants in Shanghai, China, to make new Audi A7L model, according to a report by Reuters.
SAIC Volkswagen, the joint venture of the German company and China’s biggest automaker, currently sells cars under the VW and Skoda brands. The upgraded Shanghai plant would give the JV an annual manufacturing capacity of 60,000 Audi A7L models and 60,000 new VW SUVs. Total capacity at the plants is expected to remain unchanged.
The report noted that SAIC chairman, Chen Hong, had previously said the JV planned to roll out its first Audi model early in 2022. The revamp, expected to complete by the end 2020, comes as demand for luxury cars in China remained firm even as sales in the world’s biggest auto market slumped over the past two years.
VW hopes to start production based on its MEB platform in Shanghai in the fourth quarter and has sought government approval for production of its ID4 electric crossover, Reuters said.
SAIC Volkswagen’s sales fell 37% from a year ago to 577,385 vehicles in the first half of 2020 as the coronavirus (COVID-19) pandemic hit demand in China. The JV is reported to have sold around 2 million cars last year.