Francisco Javier Garcia Sanz, a member of the carmaker's management board, described VW's plans for Seat at a press conference.

Volkswagen Group currently markets the Audi, Lamborghini, Skoda and Volkswagen brands in China. Seat, which is headquartered in Martorell, Spain, specializes in low-priced compact cars. VW is trying to move the brand somewhat upscale with a lineup of sporty cars.

According to a report by IHS Global Insight, VW initially will import Seat models into China, then launch production at its Foshan assembly plant, which will be completed in 2013. VW's joint venture with China FAW Group Corp. will run the Foshan plant, which is located in southeast China's Guangdong province.

While VW Group's other brands have prospered in China, a successful launch for Seat is not assured. Elsewhere, the brand has struggled.

In 2010, Seat lost 311 million euros (2.8 billion yuan) on sales of 340,000 vehicles. According to IHS, VW will kill Seat by 2015 if it fails to become profitable.