Shanghai (ZXZC)- SAIC Volkswagen Automobile Co., Ltd. (SAIC-VW) recently confirmed to set up Audi brand division, which will be led by Jia Mingdi, executive vice general manager of sales and market of SAIC-VW and general manager of SAIC Volkswagen Sales Co., Ltd., who is also in charge of Volkswagen brand and Skoda brand.

Currently, all items of SAIC-Audi project are reportedly underway as scheduled, including management, planning, manufacturing and R&D of products.

According to the person who briefed this matter, SAIC-VW's Audi brand division will be an innovative mode, which will have a different sales channel from that of FAW-Audi. Moreover, it will keep a close eye on high-end intelligent mobility and the demand and trend of digitalized experience in the Chinese market.

This implies that SAIC-VW's Audi brand division will adopt a new sale mode called new retail combining online sales and offline delivery, to sell cars, rather than a traditional 4S store.

It also indicates that SAIC-Audi will no longer build a traditional 4S store, but is likely to set up experience centers or delivery centers. Moreover, the existing FAW-Audi dealers will obtain the priority for offline delivery.

Industry insiders believed that the innovative mode would not only help avoid the sales channel dispute between FAW-Audi and SAIC-Audi to a maximum extent, but also enable SAIC-Audi to hold sales rights.

On June 26, Chen Hong, chairman of SAIC Group confirmed that Audi had acquired a 1% stake in SAIC-VW at SAIC Group's 2017 general shareholders' meeting. Legally, Audi's 1% stake acquisition in SAIC-VW enables SAIC-VW to be eligible to manufacture and sell Audi-branded models.