China's SAIC Motor Corp. is sticking with its plan to jointly build Audi vehicles with Volkswagen Group despite strong protests from Audi's dealers in China, according to a Chinese media report.
"The cooperation between SAIC and Audi won't change much," Caixin, a Beijing business magazine, quoted SAIC chairman Chen Hong as saying at SAIC's shareholders meeting last week.
His company is negotiating details of a joint venture with Audi, the magazine reported, citing Chen.
Volkswagen and SAIC produce VW and Skoda-brand vehicles. Last month, the two automakers signed a tentative deal to form a joint venture to produce and distribute Audis.
But the move angered dealers of FAW-Volkswagen Automobile who distribute Audi vehicles in China.
FAW-VW, a 60-40 partnership between China FAW Group and Volkswagen Group, builds Volkswagen-brand cars and five Audi models: The compact A3, the stretched A4 and A6 sedans, and the Q3 and Q5 crossovers.
Fearing an additional Audi dealership network in China would hurt their profits, FAW-VW's Audi dealers threatened to stop ordering Audi models on Dec. 1.
The dealers dropped their threat last week after obtaining assurances from Audi executives that their interests would be considered in any expansion of Audi's dealership network.
Audi is still the largest luxury brand in China, but it is losing market share to BMW and Mercedes-Benz.
In the first 10 months, Audi's China sales rose 5.7 percent year on year to 487,265 vehicles. For the same period, BMW sales rose 10 percent, while Mercedes sales jumped 29 percent.