Audi's China sales are boosted by strong demand for compact cars (Photo: Audi)

Audi and its local partner, FAW, have established a dedicated unit for mobility and digital services in China, as the German premium brand pursues a strategy to further grow its business in the world's biggest market.

Audi and FAW will also step up collaboration in financial services, as they aim to sell a growing portfolio of vehicles - including new electrically powered cars - to Chinese customers.

The expanded cooperation marks the next phase in a joint growth plan that foresees big new opportunities for electric-vehicle sales.

Audi is keen to sell more EVs in China, where new government incentives may help propel sales sharply higher. "China is the leading market worldwide for electric mobility," Audi's sales and marketing boss, Dietmar Voggenreiter, said in a statement.

Audi and FAW plan to build five additional so-called e-tron models in China, including purely battery-powered cars with ranges of more than 500 kilometers.

Audi boosted global unit sales 3.8 pc last year to a record 1,871,350 vehicles. In China, the brand, which is part of the Volkswagen Group, posted a 3.6 pc unit-sales increase to 591,554 vehicles.

It cited particularly strong - 29.7 pc - sales growth in China's premium compact segment, where predominantly younger customers bought the brand's A3 and Q3 models.