(Yicai Global) March 8 -- Audi AG and its Chinese partner FAW Group Corp. have agreed to set up two new firms focused on sales and digital development at a time when rising competition is pushing traditional carmakers to reposition themselves as mobility service providers.

The new units will operate as wholly-owned subsidiaries of FAW-Volkswagen Co., a joint venture between FAW Group and Audi parent Volkswagen AG, and enter operation by year-end, Audi's China President Joachim Wedler told Yicai Global.

By replacing the former Audi sales division with an independent unit, the company can optimize its decision-making processes and respond to market changes more swiftly, Wedler added, saying the streamlined procedures will allow the firm to kick off major product initiatives in the coming years.

China's auto market is becoming increasingly service-oriented as car-sharing and ride-hailing rise to prominence. Didi Chuxing Technology Co., the ride-hailing colossus that drove Uber Inc. out of China, has partnered up a host of carmakers, including the Renault-Nissan-Mitsubishi Alliance, to roll out car-sharing services in the country.

Audi and FAW-Volkswagen will look to add more imported and locally-made vehicles to its roster in China, Wedler added. The initiative will see the pair unveil four electric cars for Chinese consumers within the next five years as they look to reinvent themselves in the world's largest auto market.