(Yicai Global) June 12 -- SAIC Volkswagen Automotive, one of China’s oldest auto joint ventures, will spend CNY140 billion (USD19.8 billion) largely on new energy and smart cars over the next five years, according to SAIC Motor Chairman Chen Hong.

SAIC Volkswagen’s CNY17 billion (USD2.4 billion) modular electric platform factory, which uses a modular design to build battery packs of different sizes, is on schedule to start production in October, The Paper reported Chen as saying at a shareholders’ meeting yesterday.

Located in the Anting area of Shanghai’s Jiading district, it is the largest pure electric vehicle plant in China to date, capable of rolling out 300,000 units a year.

The SAIC Audi project, which has attracted much attention since it was unveiled in 2016, is moving ahead and will soon be implemented, Chen said. It will include many innovations such as being able to perform online and offline sales at the same time, he added. Volkswagen’s China-made Audis are mainly produced by another JV, Changchun, Jilin province-based FAW Volkswagen, which is not in favor of the deal.

The partnership between Shanghai’s SAIC Motor and Germany’s Volkswagen dates back over 30 years and won’t be affected by the Wolfsburg-based firm’s cooperation with other Chinese partners, Chen said.

Volkswagen Group China, the German automaker’s unit in the country, is seeking a 50 percent stake in its electric vehicle partner Anhui Jianghuai Automobile Group Holdings for EUR1 billion (USD1.1 billion), the Beijing-based firm said last month. That would hike its stake in JAC Volkswagen, their NEV joint venture in Hefei, Anhui province, to 75 percent.

The move would make Volkswagen the second foreign carmaker to own a controlling stake in its Chinese JV. BMW was the first after China removed foreign ownership limits for automakers in 2018.

Set up in 1985, SAIC Volkswagen mainly produces Volkswagen and Skoda vehicles. Last year, the Shanghai-based firm sold 2 million units, ranking second nationwide after FAW Volkswagen, according to the China Passenger Car Association.

Editor: Kim Taylor