Volkswagen AG's Seat brand will target young, urban customers when it launches sales in China.
The Spanish-based automaker will start selling sporty, more expensive versions of its Leon and Ibiza models in China in early 2012.
Seat is presenting its sporty models at the Shanghai auto show in April to broaden awareness of the brand in the world's largest auto market.
Within the VW Group brand portfolio, Seat specializes in compact cars with a sporty performance.
Seat hopes that selling cars in China will help restore the brand to profitability and boost capacity at its underused factory in in Martorell, near Barcelona. About 335,000 cars were built at the 500,000-capacity plant last year.
Seat has not ruled out local production for the Chinese market in the long term. According to a report by IHS Global Insight, VW will initially import Seat models into China, then launch production at its new joint venture plant with FAW Group in Foshan in southeast China's Guangdong province. The factory will be completed in 2013.
Last year, Seat sold 339,500 cars worldwide, with 323,600 units sold in Europe. The subsidiary sold 13,400 units in Mexico, and 2,500 in South America.
Seat sells its cars in more than 70 markets. The company has not pursued earlier plans to sell Seat models in Brazil and is not considering entry into the U.S. market.
The brand has been hit hard by the economic slump in its home market and had a slight recovery last year, narrowing its operating loss by 28 million euros to 311 million euros.
VW Group currently markets the VW, Audi, Lamborghini and Skoda brands in China.