SHANGHAI — Shanghai Volkswagen Automotive Co. Ltd. will introduce its latest version of the popular Santana sedan sometime this year, officials say.

The first models, which will be based on the Passat B5 produced by Volkswagen AG in Germany, will be launched near the end of the year, with mass production starting in 2000.

Industry observers say the move is meant to counter competition from Shanghai GM Automotive Co. Ltd., which will begin selling three Buick luxury sedans in April, with a price range starting at about US$36,000. The two automakers share the same partner, Shanghai Automotive Industry (Group) Corp.

The new Santanas reportedly will be priced around US$26,570. Shanghai VW last year sold about 230,000 cars, making the company the biggest sedan producer in China.