China’s first carmaker FAW joins the rush to ditch petrol guzzlers in a 30 billion yuan venture with Audi to produce electric cars

FAW Group, founded in 1953 to spearhead Mao Zedong’s industrialisation, will team up with its German partner Audi to build a 30 billion yuan (US$4.6 billion) plant in the Jilin provincial capital of Changchun in north-eastern China. FAW, which already makes cars in China with Audi and its parent Volkswagen, will own 40 per cent of the venture while the two German carmakers will own 60 per cent, according to a statement.

“With the new Audi-FAW company in Changchun, we are further expanding our presence in the Chinese market and strengthening our position as a manufacturer of fully electric premium vehicles through local production,” said Audi’s chairman Markus Duesmann, in the statement. The first Audi-FAW electric vehicle will go into production in 2024.

The plan is one of the most ambitious and significant developments in the world’s largest market for new-energy vehicles (NEVs), where 2020 sales jumped 12 per cent to 1.17 million units, defying the consumption slump and depressed sentiments during the coronavirus pandemic. Sales this year may increase by 50 per cent to 1.8 million units and up to 3 million by 2025, spurred by generous government subsidies and a wider variety of attractive models launched, according to an estimate by China’s automotive industry officials.

Audi, which makes the Chinese ministerial standard-issue A6 sedans in Changchun, has been eyeing the NEV market for a long time, announcing last year that it wants electric models to make up one-third of its sales in China by 2025.