Chinese carmaker FAW Group has re-launched its Red Flag brand in the country. This means that FAW’s Red Flag sedans are now available to the public. FAW, which has already delivered over 500 Red Flag cars to government agencies, is planning to invest at least CHY10.5 billion ($1.7 billion) to develop the brand through 2015.
Aside from developing Red Flags’ cars, FAW also owns full intellectual-property rights over its engine, chassis, body design and electronics. The brand has been included by China’s Commerce Ministry as an item for foreign aid.
FAW will be up against foreign luxury carmakers like Audi, BMW and Mercedes-Benz. Cao He, an analyst with China Minzu Securities Co., compared China's vehicle market to a “jungle full of ferocious beasts," adding Red Flag would not survive unless it has “the toughest type of DNA in its blood."
he re-launched brand is getting support from the current Communist Party leadership. Communist Party chief Xi Jinping remarked in December 2012 that "it doesn't look good" for Chinese government officials to ride in foreign-brand cars all the time.
In April 2013, FAW delivered 12 Red Flag sedans to China's eastern Zhejiang provincial government, which acquired the cars to support the Party's government-car reforms. Red Flag cars were in the past typically reserved for high-ranking government and Party officials. FAW build around 1,500 Red Flag cars before it was discontinued in 1982. The government had since tried to revive the brand, but failed. [source: Bloomberg]