China's SAIC Motor Corp has inked a deal with Audi AG, which may see the Chinese company producing the luxury cars. The deal was signed on Friday and is likely to be announced on Monday. 

According to Sina, the deal will lead to a joint venture where SAIC and Audi will have an equal stake. The deal will also let SAIC manufacture Audi models as an OEM. The first shipment is expected to reach the market by April next year.

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Audi currently builds cars in China through its joint venture with FAW. The cars are manufactured in Foshan and Changchun. The company produces the A3 compact car in Foshan while the A4 and A6 variant is produced in Changchun. Both FAW and SAIC have a joint venture with Volkswagen as well.

However, the new deal has allegedly sparked anger among Audi dealers. The Audi Dealers Association has reportedly issued a statement that "the interests of Audi dealers will be further damaged if you set up a new sales company." The association also claimed that some of the dealers are saddled with high inventory.

Audi has been a leading player in luxury car market in China. However, recently, it has been losing market share to its competitors. Its turnover has also been affected by the Chinese government's crackdown on luxury cars.

The company sold 440,233 units so far this year in mainland China and Hong Kong, showing a 6.2 year-over-year growth. Its competitors BMW and Mercedes-Benz saw their sales grow by 10.6 percent and 29.5 percent year-over-year respectively. 

TagsSAIC Motor Corp, Audi AG, Foshan, FAW