There will be a new premium compact sedan for the Chinese market rolled out by Shanghai VW, a joint venture between SAIC and Volkswagen. The new model will have the “most advanced platform and engine technology,” SAIC said. Apparently, Shanghai VW has long hoped to build a premium model.

Reports speculate that this will boost the profits of Shanghai VW nearer to the level of VW’s other JV in China, FAW-Volkswagen. Shanghai VW currently builds the Polo, Touran, Santana, Lavida, Passat and Tiguan, but FAW-Volkswagen builds Audi sedans, and premium marques carry a bigger margin. The FAW side also makes the Golf, Jetta, Sagitar, New Bora, Magotan and (Passat) CC models.

In the first quarter of 2011, Shanghai Volkswagen sold 227,835 vehicles, while FAW Volkswagen shifted 225,256 units including 42,667 Audi models. Big numbers.