ON October 21 2007, Volkswagen AG and Shanghai Volkswagen (SVW) signed a "development services contract," which clarifies their joint efforts on the development project for the new generation mid-size car.SVW's role in the project will be clearer from now on and the future will see SVW becoming more involved in research and development with the goal of integrating this R&D throughout the worldwide network of Volkswagen products.

　　In July, the two sides signed an agreement to jointly develop a new mid-size car for the domestic and North American market. As noted in a joint statement, the car will be based on a new B-platform and will serve as a successor to the PASSAT Lingyu model.

　　SVW will develop the vehicle body of the new car, including major elements of the exterior and interior. Maximum use will be made of SVW's test facilities and venues, prototype construction as well as the company's parts and tools manufacturing capabilities.

　　This project is noteworthy since it marks the first time that SVW will be involved in the development of a new vehicle intended for both Chinese and global markets.