Skoda ChinaChina – Volkswagen, SAIC Motor Corporation and Skoda Auto have signed a memorandum of understanding to expand the brand’s model range and invest in new automotive technologies. Subject to government approval, Skoda will acquire a stake in the joint venture SAIC Volkswagen.

The development of Skoda’s model range in China will include electric drive concepts, connectivity and digitisation. Under the agreement, SAIC Volkswagen will invest €2 billion ($2.3 billion) over the next five years.

Noting that China is now Skoda’s largest market, CEO Bernhard Maier commented: “Our aim is to double Skoda deliveries in China by 2020. For this, we’re now laying the foundations together with SAIC Volkswagen.” The brand is already planning an SUV campaign in collaboration with its joint venture partner, including the development of another body variant of its largest model and the launch of a new crossover utility vehicle. Sales of the long wheelbase Skoda Yeti, which is made in Anting, have increased by over 300% in the first two months of 2016 compared with the same period last year.

Skoda started production in China with the Octavia in 2007, followed the next year by the Fabia; Anting reached the milestone of 1m units in July 2013. The company now also makes vehicles at Nanjing, Yizheng and Ningbo. Between 2007 and 2015, deliveries in China increased from 27,300 to 281,700, representing about one quarter of total sales.