He denied reports that the dealers were seeking 1 billion yuan (S$206.8 million) in compensation, without giving more detail. SAIC and Audi parent Volkswagen AG signed a memorandum of understanding on Nov 11 in Germany to explore the collaboration. VW now makes Audis in China exclusively with China FAW Group Corp. VW and SAIC will look at manufacturing Audi-brand cars at its existing equally held venture in China, producing new-energy vehicles, as well as selling imported Audi cars together. The talks follow the first annual decline in sales for the premium brand in China since 1988 as it tried to remake its image as the favorite ride for government officials in China and as state-owned FAW remains mired in a corruption probe that has seen its chairman and several senior executives removed by the Communist Party. Audi takes the interests of its dealers very seriously and will hold open and direct talks with its network partners, the company said in an e-mailed statement.