In the first 10 months of this year, sales jumped by more than 40 per cent to 276,000 units year-on-year.

The dramatic increase was fuelled by local development combined with the overall boom in China's car market.

Sales of all China-made vehicles are forecast to grow from 5.76 million units in 2005 to 7 million units this year, including 4 million passenger cars.

Looking ahead, Chen Zhixin, general manager of the venture, says its technical centre will have independent development ability in coming years.

"We will boost our development capability to the same level as Volkswagen's Skoda and Seat," Chen says.

Skoda is the Czech unit of Volkswagen and Seat is a Spanish brand wholly owned by the German Group. Last year, Skoda sold 492,000 vehicles globally, and Seat sold 422,000.

Shanghai Volkswagen's technical centre is planning local development for more than 10 new models to be launched in coming years under the Volkswagen and Skoda names.

At present, the technical centre is doing body design for new models, face-lifts for existing products, and localizing parts used for models introduced from the Volkswagen Group. More experimental, the centre is developing new-fuel automotive technologies.

The venture launched the Passat Lingyu mid-sized sedan, a redesigned model based on the Passat B5, last November. Its technical centre made more than 200 improvements to the Lingyu. The changes were based on market research involving 20,000 people in 30 Chinese cities.

Local research paid off. This year's sales of Lingyus sedans averaged 8,700 every month from January to October. This was dramatically up from fewer than 6,000 Passat B5 sedans a month last year, according to market data.

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