NewDisappointing sales dash revival hopes for Hongqi, auto brand with 'revolutionary history'

A leading Chinese automobile manufacturer’s ambitious bid to revive Hongqi, or "Red Flag", the country’s most famous home-grown luxury car brand, was dashed when its new flagship model was revealed to have only sold 3,000 units last year, reported Chinese Business News.

In comparison it took German luxury brands BMW and Audi, both direct competitors of Hongqi, just three days and two days respectively to sell the same number of cars in China.

The lacklustre sales performance means First Automobile Works (FAW), the manufacturer of Hongqi, only used about 10 per cent of its Hongqi production line capacity as the company once claimed it was able to churn out as many as 30,000 units per year.

This could be a major blow for state-owned, Jilin-based FAW Car Company, where the country’s first domestically produced passenger vehicle was built.

Last year the automaker announced the launch of H7, the newest car series with different models sold for between 300,000 and 480,000 yuan (HK$382,000 – HK$611,000). Advertising it as a wholly domestically produced luxury vehicle, the company tagged it “the official car for minister-level officials” and trumpeted it as a great revival of Hongqi.

Hongqi’s inadequate sales is related to its after-sales service and sale channels, which fall short against its competitors, said Chinese Business News, a leading business daily in China.

It explained that Hongqi stores do not offer car repairs services. “It is like having to take your Audi to a Volkswagen store, or Lexus to a Toyota store for repair,” car critic Zhang Zhiyong was quoted as saying. “This kind of after-sales service has driven away quite a few consumers.”