BEIJING (Reuters) - A little-known U.S.-based engineering and design firm said it plans to invest 10 billion yuan ($1.41 billion) to make sports cars with China’s FAW Group under the brand of choice of late revolutionary leader Chairman Mao Zedong, Hongqi.
Silk EV on Monday told Reuters it has signed a memorandum of understanding with FAW to launch a joint venture in the state-owned automaker’s hometown of Changchun, northern China, to make cars it has dubbed the S-series.
The plan was first reported on Friday by state media CCTV and Xinhua. FAW confirmed the CCTV report to Reuters.
Silk EV is a full auto solutions provider focused on the China auto market, its website showed.
It launched a company in Shanghai’s free trade zone in April last year with registered capital of 1 million yuan ($141,281), showed a filing on the official National Enterprise Credit Information Publicity System.
Hongqi, meaning Red Flag, was launched by FAW in 1958 and is widely regarded as a symbol of China’s ruling Communist Party, with former leader Mao often seen riding in high-end black saloons.
It has undergone several revamps over the decades, falling out of favour in the 1980s and now enjoying a revival as the government promotes home-grown brands.
FAW aims for annual Hongqi sales to double to 200,000 vehicles this year and reach 1 million by the end of the decade. Its plans for the brand include having 21 models by 2025.
($1 = 7.0781 Chinese yuan renminbi)
Reporting by Yilei Sun and Norihiko Shirouzu; Editing by Christopher Cushing
Our Standards: The Thomson Reuters Trust Principles.