Audi Restructures China Joint Ventures to Strengthen EV and ICE Business Strategy

Audi is preparing a major restructuring of its China operations as the premium automaker looks to strengthen its position in the country’s increasingly competitive automotive market. The company plans to redefine the responsibilities of its two long-standing joint ventures by separating the management of traditional internal combustion engine (ICE) vehicles and next-generation electric mobility programs. The restructuring is expected to formally conclude years of overlap and competition between the company’s northern and southern China operations while enabling a more focused product and sales strategy.

Under the planned arrangement, all sales rights for Audi-branded vehicles carrying the traditional four-ring logo, including both ICE and electric models, will be consolidated under FAW Audi. The joint venture, headquartered in Changchun in Jilin province, will continue managing Audi’s core premium business portfolio in China. This includes vehicles built on the Premium Platform Combustion (PPC) and Premium Platform Electric (PPE) architectures, which remain central to Audi’s global premium vehicle roadmap.

At the same time, SAIC Audi will undergo a strategic transition by discontinuing responsibility for conventional ICE vehicle sales. The Shanghai-based operation will instead focus entirely on the new AUDI letter-logo sub-brand developed jointly by Audi and SAIC for the Chinese market. Industry sources familiar with the development indicated that the official restructuring announcement is expected soon, although the companies have not yet publicly confirmed the details.

The restructuring effectively creates a clear division of responsibilities between the two ventures. FAW Audi will continue serving customers seeking premium luxury vehicles powered by combustion and advanced electric platforms, while SAIC Audi will concentrate on intelligent electric mobility products tailored specifically for local consumer preferences in China. This separation is intended to reduce internal competition that has existed since Audi established its dual joint-venture system nearly a decade ago.

SAIC Audi has reportedly already started clearing inventory of existing ICE vehicles as part of the transition process. Once completed, its retail network will retain only AUDI-branded electric products designed for the emerging smart EV era. Audi aims to maintain profitability from traditional combustion-engine vehicles through FAW Audi while simultaneously using SAIC’s localized development capabilities to accelerate growth in China’s fast-expanding electric vehicle segment.

The AUDI sub-brand was officially introduced in China on November 8, 2024, marking a significant step in Audi’s localization strategy. Unlike conventional Audi vehicles that feature the iconic four-ring emblem, the AUDI brand uses fully capitalized AUDI lettering as its primary identity. The sub-brand has been created specifically for the Chinese market and is designed to appeal to buyers seeking advanced digital experiences, connected technologies, and locally optimized electric vehicles.

The first production model under the new AUDI brand, the E5 Sportback, is scheduled to enter the market in September 2025. More recently, the company launched pre-sales for its second mass-production vehicle, the AUDI E7X, which carries a starting pre-sales price of 289,800 yuan. The vehicle forms part of Audi’s broader strategy to expand its presence in China’s premium EV segment through highly localized products and technology partnerships.

Last month, Audi and SAIC signed a new strategic cooperation agreement aimed at deepening collaboration in vehicle development and intelligent mobility technologies. A major part of the agreement involves establishing an Audi-led innovation and technology center in Shanghai dedicated to complete vehicle research and development. The facility is expected to accelerate local engineering efficiency while supporting faster deployment of China-focused digital vehicle technologies.

Key Development Areas Under Audi and SAIC Partnership

The upcoming AUDI lineup will be built on the Advanced Digitized Platform (ADP), a next-generation architecture developed for intelligent connected vehicles. Audi and SAIC plan to jointly launch four new AUDI models over the coming years. These vehicles will incorporate a high degree of localized Chinese technology integration, including battery systems from CATL, advanced smart-driving solutions from Momenta, and artificial intelligence large-model capabilities supplied by ByteDance.

In addition to battery-electric vehicles, SAIC Audi management has indicated that other electrified powertrain technologies remain under evaluation. Plug-in hybrid electric vehicles (PHEVs) and extended-range electric vehicles (EREVs) are among the potential future options being considered as Audi adapts to changing Chinese consumer demand and regulatory trends. This approach allows the company to maintain flexibility across multiple propulsion technologies while expanding its electrified portfolio.

Meanwhile, FAW Audi is working to improve the competitiveness of its combustion-engine and PPE-based EV products by integrating intelligent technologies from Huawei. Through the dual-track operational strategy, Audi intends to create a more efficient organizational structure that minimizes overlap between the two ventures while improving product differentiation, channel management, and long-term profitability in the Chinese automotive market.

Frequently Asked Questions

Why is Audi restructuring its joint ventures in China?
Audi is restructuring its China joint ventures to reduce operational overlap and improve competitiveness in both combustion-engine and electric vehicle markets. The company aims to separate responsibilities between FAW Audi and SAIC Audi for better efficiency and product focus. Under the new strategy, FAW Audi will manage all traditional four-ring branded vehicles, while SAIC Audi will focus entirely on the AUDI electric sub-brand and localized intelligent mobility technologies developed specifically for Chinese consumers and market requirements.

What is the difference between Audi and the new AUDI brand in China?
The AUDI brand is a China-specific electric vehicle sub-brand jointly created by Audi and SAIC for the local market. Unlike traditional Audi vehicles that use the iconic four-ring logo, the AUDI brand uses capitalized AUDI lettering as its identity. The new brand focuses on intelligent connected electric vehicles with localized Chinese technologies, including advanced batteries, AI systems, and smart-driving solutions. It represents Audi’s strategy to strengthen its position in China’s rapidly expanding premium electric vehicle market.

What technologies will future AUDI electric vehicles use?
Future AUDI electric vehicles will be built on the Advanced Digitized Platform developed for intelligent connected mobility solutions. The vehicles will integrate several localized Chinese technologies to improve performance and digital functionality. This includes battery systems supplied by CATL, smart-driving technologies from Momenta, and AI large-model capabilities from ByteDance. Audi and SAIC also plan to establish a dedicated innovation and technology center in Shanghai to accelerate development of future intelligent vehicle technologies and localized electric mobility products.