Prices on the line of Bora sedans produced by FAW VW, a joint venture between China's First Automotive Works Corp (FAW) and Germany's Volkswagen Group, fell on Sunday by as much as 15,000 yuan (US$1,800) as the company competes with domestic rivals.

The 1.6 and 1.8-litre Bora sedans now retail between 161,300 yuan (US$19,500) and 227,000 yuan (US$27,448).

The move is intended to boost FAW VW's sales amid mounting market competition, owing to other carmakers' price cuts and new product launches.

FAW VW, which is the second biggest passenger car manufacturer in terms of annual unit sales in China, sold 111,115 cars during the first five months of this year, an increase of 54.5 per cent from a year earlier, according to the company.

The Boras' sales grew by 128 per cent over consecutive years to 30,699 units during that period.

FAW VW, which also produces the Audi A6 and A4, Jetta and Golf, is aiming at sales of 267,000 units this year, up from 200,000 sold last year.

Shanghai Volkswagen and Dongfeng PSA Peugeot Citroen, two major competitors of FAW VW, have already cut prices of their vehicles along with other carmakers in China.

More new models have been launched, including Dongfeng Peugeot Citroen's Xsara model, Dongfeng Motor Co Ltd Sunny model and Shanghai General Motors' Excelle model, all going head-to-head with the Bora on the market.

FAW VW's price cut is also seen as part of FAW's efforts to fulfil expansion plans this year.

FAW is China's flagship automotive company and is based in Northeast China's Jilin Province. The company aims to increase its output by 900,000 to 1 million units this year, up from 520,000 units last year.

Tianjin FAW Xiali Automobile Co, a subsidiary of FAW, slashed prices of its compact Vizi, Echo and Xiali 2000 cars by as much as 10,000 yuan (US$1,200) at the beginning of this month.

FAW Car Co Ltd, the listed unit of FAW, also cut prices on its line of Red Flag sedans by as much as 40,000 yuan (US$4,830) earlier this month.

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