Audi has sorted its dispute with dealers in China to drive up its business in the world's largest car market

Rebecca Smith
Audi has cleaned up dealer concerns with the new agreement
Audi has cleaned up dealer concerns with the new agreement (Source: Getty)

Audi has struck a deal with its dealers in China regarding how cars produced with Chinese firm SAIC Motor will be sold in the country.

The agreement quells the tension over the matter, which arose after Audi parent Volkswagen had revealed plans in November to produce cars with SAIC.

Read more: Volkswagen's Audi is in talks with China's biggest car manufacturer

Before that, the car giant had made Audis in China solely with FAW Group.

Under the agreement announced today, any SAIC-produced cars will be distributed through the existing sales network.

Dealers, who sell Audi cars imported from Germany as well as Chinese-made vehicles as part of Audi's joint venture with FAW Group, had raised concerns over the fresh arrangement. They said the partnership could cause dealers to lose out to SAIC on access to future products, denting their profits.

Audi said it had signed the agreement based on "a common understanding of how the planned cooperation between SAIC and Audi will meet the interests of all parties involved".

Dietmar Voggenreiter, board member at Audi, said:

This very constructive agreement is a strategic milestone for Audi’s business in China.

It paves the way for our two partner strategy and will allow us to further strengthen our commitment to China.

Audi said that "in accordance with legal requirements", a new sales steering structure will be set out for the unified distribution of Audi products from two partners.

The agreement essentially settles concerns that could have disrupted the car firm's business in what is the world's largest car market.

Chinese regulations state foreign car firms must collaborate with domestic manufacturers in order to build vehicles there. And the German company is seeking to strengthen its position at the top of China's luxury-vehicle market.

It's currently the best-selling premium car brand and was an early entrant into the Chinese market, but Audi has been losing ground to newer models.

The company also said today that cooperation in the field of electric mobility will be ramped up, and in the next five years, will bring out five new e-tron models to bolster its family of electric and hybrid vehicles.

Read more: Volvo eyes electric future as it puts the brakes on diesel engines

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