Shanghai Volkswagen Automotive Corp, China's first Sino-foreign auto company, plans to shift part of its production to neighboring Jiangsu Province so that it can produce new models in its local plant.

　　The 50-50 joint venture between Volkswagen AG and Shanghai Automotive Industry Corp will transfer production of its best-selling, 18-year-old Santana sedan to Yizheng city in the near future, company officials said.

　　"SAIC Yizheng Automotive Co Ltd is likely to become our partner to produce part of the Santana sedans, so Shanghai VW can meet the soaring demand in the domestic market," said a company official, who asked not to be identified.

　　The Yizheng plant, a wholly-owned subsidiary of Shanghai Automotive, makes the Sabre four-seat pickup truck, which is based on General Motors Corp's Opel Combo chassis. The factory is capable of producing up to 30,000 vehicles a year.

　　General Motors is another overseas partner of Shanghai Automotive.

　　Shanghai Auto will sell its 99 percent stake in SAIC Yizheng to its publicly traded unit - Shanghai Automotive Co - for 297 million yuan (US.88 million) within the week, Bloomberg News reported.

　　"Moving the production of Santana to Yizheng will help workers to enhance their auto making skills and apply them in producing our own brand of cars," said Zhang Jingen, corporate secretary of Shanghai Automotive Co.

　　Volkswagen has two production sites in China. Its venture with Shanghai Auto makes the Santana, Passat, Polo and Gol models. A second venture with First Automotive Works Corp in Changchun, northern Jilin Province, makes the Audi A6, A4 and the Volkswagen Jetta and Bora models.

　　Germany's largest automaker has sold more than 2 million Santana cars in the country since it started to make the model in Shanghai in 1985. Sales of the Santana rose 53 percent to 79,198 units in the first four months of the year from the same period in 2002.

　　Volkswagen, which plans to invest 1 billion euros (US.2 billion) this year in China, is also considering to build another production center in China to expand output, according to Zhang Suixin, managing director of Volkswagen (China) Investment Co.

　　Volkswagen's output in China is expected to exceed 600,000 units this year and 1 million units by 2007.

　　Volkswagen's sales in China rose 86 percent in the first quarter to 162,000 units. The country has surpassed the United States to become the German automaker's largest overseas market.

　　Automakers are vying to ramp up production in the country, the world's fastest-growing car market.