Volkswagen's has said that it is in talks with China's SAIC Motor Corp for a long-term collaboration. But, as Hayley Platt reports, dealers for its existing joint venture say it could cause them ''potentially fatal damage.''
It already has a joint venture with one Chinese car company. Now Volkswagen's Audi is in talks with another. The German car maker says it's negotiating with SAIC, China's largest automaker. Paving the way for it to make Audi branded cars in China. (SOUNDBITE) (English) CMC MARKETS ANALYST, MICHAEL HEWSON, SAYING: "I think if you want to gain access to the Chinese car market then the joint venture is the way to go. They are finding that their market share is starting to get nibbled away at by Mercedes and BMW and if they want to say ahead of the game, given their problems with the emissions scandal then ultimately China is probably one of the best markets to do that." Audi got an early foothold in China and is top of its luxury-vehicle market. Last year it bought a 40 percent stake in FAW - throwing the struggling auto maker a life line. But it's been slow to introduce new models - losing ground to rival car firms. Not just the German ones - Toyota's Lexus and General Motors Cadillac are popular too. A series of corruption scandals at FAW hasn't helped. And some dealers aren't happy - saying a new joint venture could cause the existing one 'potentially fatal damage.' But SAIC will give Audi a bigger return at a time when VW's still trying to recover from the emissions scandal .