China's SAIC Motor and German car group Volkswagen AG have extended their joint venture by 10 years, prolonging their collaboration at SAIC Volkswagen until 2040.

This agreement, which was signed on Tuesday, marks the second renewal of the partnership, highlighting the success of Sino-German cooperation in the automotive sector.

SAIC Volkswagen, established in 1984, is the oldest extant automotive joint venture in China, with its cumulative sales exceeding 28 million units.

The renewal reflects mutual recognition of past achievements and strong confidence in the future of the joint venture. It also emphasizes the strategic direction of electrification.

"With the long-term contract extension, we underline the importance of this collaboration and the significance of the Chinese market for the Volkswagen Group," said Ralf Brandstaetter, member of the board of management of Volkswagen AG for China.

"We are accelerating the transformation of SAIC Volkswagen along our 'In China for China' strategy on all levels, bringing a new generation of electrified vehicles onto the road by 2026," he added.

Wang Xiaoqiu, chairman of SAIC Motor, praised Volkswagen's foresight when it came to China from afar 40 years ago.

"Together with SAIC, it pioneered the path of Sino-foreign automotive joint ventures, successfully forging a mutually beneficial cooperation model."

He said the two companies will initiate a new stage of joint venture cooperation, contributing innovative forces to the high-quality and sustainable development of China's automotive industry.

Among other things, both shareholders will integrate their respective advantageous resources to support SAIC Volkswagen in developing multiple new models, including pure electric and plug-in hybrid vehicles, tailored for the Chinese market.

By 2030, SAIC Volkswagen will launch 18 new models, 15 of which will be exclusively developed for the Chinese market.