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Volkswagen to launch Spanish car brand Seat in China

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Volkswagen to launch Spanish car brand Seat in China

Volkswagen AG said May 27 that it will roll out its Spanish car brand Seat SA in the Chinese market in the next two to three years, with the help of its JAC Volkswagen joint venture with China's Anhui Jianghuai Automobile Group Corp. Ltd., which does business as JAC Motors.

Seat is known for its compact cars, mini-cars and compact SUVs, including the Mii, Ibiza, Leon, Arona, Alhambra, Ateca and Tarraco.

Germany's Volkswagen said Seat's imminent launch in China is part of the wider group's global transformation strategy and its decarbonization program, under which it aims to expand the group's vehicle range.

More than half of the 22 million electric cars planned by Volkswagen will be produced in China by 2028, the company said. The group aims to deliver about 1.5 million electrified vehicles to customers by 2025.

The launch of Seat in China is expected to coincide with the 2021 opening of JAC Volkswagen's research and development center in Hefei in China's Anhui province, where the joint venture and JAC Motors is located. Volkswagen said the facility will provide resources for the co-development of battery vehicles and components.

Additionally, JAC Motors and Seat will work together to develop their own platform for smaller electric cars, according to the release.

Seat CEO Luca de Meo, in a statement, said: "The signing of this agreement is a new step forward in the strategic plan for the globalization of Seat. With the introduction of our business in China, we are boosting the future of the company and of electric mobility at the same time."

De Meo added that China is the benchmark country for Seat's electric vehicles.

"The close cooperation between Seat and JAC will allow us to create synergies, which will significantly increase our market coverage. Notably, the smaller electric cars segment is growing rapidly and offers a lot of potential," Volkswagen CEO and Seat Chairman Herbert Diess was quoted as saying.

Sales of Volkswagen vehicles, as well as its other brands, in China have decelerated in recent months. The decline continued in April as customers remained reluctant to purchase vehicles despite reduced value-added-tax on automobiles that were applied from the start of the month.

Apart from the planned launch of Seat, Volkswagen also announced a new agreement between JAC Volkswagen and the city of Hefei to develop future mobility solutions under a smart city partnership. Under the project, the joint venture will test the demand for future mobility in a fully connected city in Hefei. The data gathered will be used to develop smart mobility solutions, Volkswagen said.

Volkswagen's local arm, Volkswagen Group China, signed the strategic framework agreement for the smart city project with its associated mobility company, Mobility Asia, as well as JAC Motors and the local government of Hefei. The parties will pool their resources and collaborate on autonomous mobility services, including self-driving vehicles, or robo-taxis, and autonomous fleet management, according to the release.

The announcement comes over a month after Volkswagen was reported to be eyeing a "big stake" in JAC Motors. However, the Chinese company denied the idea, saying the two companies have not held "formal business discussions" on the subject of an equity acquisition.