Volkswagen and its Chinese joint-venture partner SAIC Motor is investing 4.13 billion yuan (P 30.5 billion pesos~) to revamp its car plant in Shanghai in preparation to add a new brand to its portfolio: Audi.

In government documents seen by Reuters, Volkswagen will produce the Audi A7 (in a China-friendly long wheelbase form) there. Currently, SAIC Volkswagen produces and sells cars under the VW and Skoda brands including the locally available Santana, Lavida, Lamando, and Tiguan.

With the revamp at its Shanghai plants, the SAIC Volkswagen is aiming for an annual manufacturing capacity of 60,000 Audi A7Ls and 60,000 new Volkswagen utility vehicles. The total capacity at the plants will remain unchanged.

The revamp, expected to be done by the end 2020, comes as demand for luxury cars in China remained firm even as sales in the world’s biggest auto market slumped over the past two years.

Audi also has a long-term collaboration with FAW Group in China.