Shanghai (ZXZC)- SAIC Motor, Audi and FAW Group announced on Dec. 23 they have come to an agreement on the future cooperation in sales and service business, a significant milestone for the much-anticipated SAIC-Audi project.

Under the agreement, SAIC Audi’s products will be sold via Audi's marketing network, and its after-sales service will also be supported by Audi's existing service system.

The first model under the joint-venture project is expected for delivery in early 2020.

Photo credit: SAIC Motor

The first SAIC-Audi's model would be the Audi A7L and its presale is likely to kick off as early as the fourth quarter of 2021, according to a Chinese media outlet.

The SAIC-Audi project can date back to 2018. In June of that year, Volkswagen transferred the 1% equity interests it held in SAIC Volkswagen (SAIC VW) to Audi AG, laying the necessary groundwork for the development and production of SAIC-Audi’s first vehicle model. Besides, it also indicates SAIC VW was qualified to produce and sell Audi-branded products.

SAIC Volkswagen, the joint venture of Volkswagen Group, currently only sells cars under the Volkswagen and Skoda brands. Audi is Volkswagen’s luxury car unit.

Fast progress has been made this year. Reuters reported in mid-July that Volkswagen Group and SAIC Motor planned to invest 4.13 billion yuan ($631 million) to revamp their car plants in Shanghai to make new Audi sedans.

With the revamp at its Shanghai plants, the joint venture was aiming for an annual manufacturing capacity of 60,000 Audi A7L sedans and 60,000 new Volkswagen SUVs. The total capacity at the plants would remain unchanged, according to Reuters' report.