Audi Q3.automotiveIT

Audi showed its new Q3 SUV at the Beijing auto show in April, 2012 (Photo: Audi)

With demand for its cars surging, Audi plans to invest 3 billion euros in China in the next five years, according to a report in the government-owned China Daily.

The newspaper, citing an interview with Wolfgang Duerheimer, Audi's head of research and development, said the funds are earmarked to develop, produce and sell new cars in the world's biggest market.

Duerheimer is quoted as saying the investment will boost Audi's annual car production in China to 700,000 units "quickly."

The premium car maker, a division of Germany's Volkswagen Group, posted a 31.2 pc rise in Chinese unit sales in the first 10 months of the year to 332,959. That's already more than the 313,036 cars the brand sold in China in all of 2011.

“China remains one of the major growth drivers for Audi," said Luca de Meo, head of sales and marketing for the carmaker.

De Meo added that Audi is gaining market share in China thanks to recent introductions of new models such as the small Q3 SUV.

The China Daily also quoted Duerheimer as saying Audi and its Chinese joint venture partner FAW will use some of the investment to strengthen collaboration on new technology and product development including gasoline-electric hybrids, plug-in hybrids and full electric vehicles.