China’s luxury car brand continues to fight for market share
Government invested US$1.6 billion over four years in ‘Red Flag’ brand, but flagship model sold only 5,000 units last year
A massive investment in research and design has apparently failed to reverse the fortunes of Chinese luxury car brand, Hongqi, local media reported.
Between 2011 and 2015 the government ploughed 10.5 billion yuan (US$1.6 billion) into the state-owned company, a unit of FAW Group, which is known as Red Flag in English, People.com.cn reported on Monday.
Last year, the company sold 5,000 of its flagship H7 model, while in the first quarter of this year it sold 1,000 units, the report said.
It did not provide comparative figures, but said BMW sold 5,000 cars every three days in China, and Audi sold that many every two days.
The Hongqi H7 Sedan l was launched in 2013, and about 3,000 units sold in the first year. Most were bought by government departments for official functions.
In 2014, sales fell to 2,708, before rising to 5,021 in 2015, news website Nbd.com.cn reported.
The spike in 2015 was a result of China banning its army from using foreign cars in a bid to promote local brands.
The current retail price of an H7 is between 249,800 and 479,800 yuan.
The first Hongqi limousines were made by First Automobile Works in the late 1950s with the help of Soviet expertise and technology.
They were seen as symbols of China’s industrial progress, and until the 1980s were largely reserved for Communist Party elite and foreign dignitaries.
Xu Liuping, FAW’s chief executive, said earlier this month that Hongqi would continue to invest in the brand, the report said.