Pang Da is building two new dealerships in southern Yunnan province that will sell imported Volkswagen AG Phaeton cars. The company expects luxury autos will make up more than 20 percent of its total sales in the "next couple of years," Chairman Pang Qinghua said in a phone interview.

"Demand for premium cars has been surging and we will speed up construction of new outlets selling them," said Pang. "There will be more good news coming."

The Tangshan, Hebei province-based distributor is expanding its network to cater to demand for premium cars in China, which has grown to be the biggest market for automakers from Bentley Motors Ltd. to General Motors Co. and where the number of millionaire households surged by almost a third in 2010.

Luxury carmakers BMW AG and Volkswagen's Audi AG posted higher sales in January, bucking the 24 percent industrywide drop, after an earlier-than-usual Lunar New Year holiday season deprived dealers of a week's worth of sales.

BMW sales in China rose about 30 percent to 25,000 vehicles, Mathias Schmidt, a spokesman for the Munich-based company, said Feb. 10, citing preliminary figures. Audi deliveries gained 23 percent to 27,206 vehicles, the company said in a statement.

Pang Da also plans to add 17 dealerships selling FAW Volkswagen cars across China in cities including Guangzhou, Harbin and Tangshan, Pang said. Last year, the company opened 12 Mercedes-Benz outlets, six for Aston Martin, four for Audi, two for Lexus, and one Land Rover dealership, he said.

The company also will expand its truck business as well as its auto-financing operation, Pang said, without elaborating.