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Hongqi
In 2017, Hongqi β the brand that carried Mao Zedong through Tiananmen Square β sold fewer than 5,000 cars. The chairman of FAW staked his career on a revival, reassigning 8,000 personnel in a week and hiring Rolls-Royce's design chief. Eight years later: 460,000 vehicles, 43 countries, and China's #4 luxury brand. But the electric division is failing.
From Changchun to 43 Countries
Transformation Arc
In 2017, Hongqi (ηΊ’ζ, “Red Flag”) β the car that carried Mao Zedong through Tiananmen Square and ferried Richard Nixon beside Zhou Enlai β sold fewer than five thousand vehicles. Staff joked the brand appeared more often in museums than on roads. The newly appointed chairman of its parent company staked his career on reversing the collapse. Eight years later, Hongqi delivers 460,000 cars annually. But its electric division is failing at the worst possible moment.
The car that built a republic’s image
Hongqi’s origin is inseparable from the People’s Republic itself. In May 1958, workers at First Automobile Works (FAW) in Changchun β China’s “Motor City,” built from scratch in the 1950s with Soviet technical assistance β received an order that combined industrial ambition with political urgency: build a Chinese luxury car. They disassembled a Chrysler Imperial down to its last bolt, studied every component, and in thirty-three days produced a working prototype. The car was dispatched immediately to Beijing. Mao Zedong rode in it. Zhou Enlai made it his official vehicle.
The CA770, which entered production in 1966, became the definitive state limousine β a vehicle that carried every senior Chinese leader for the next fifteen years and served as the diplomatic fleet for visiting heads of state. When Richard Nixon arrived for his historic 1972 visit, he was collected in a CA772T bulletproof limousine, one of only a handful of armoured variants ever built. Hongqi vehicles were gifted to foreign leaders as tokens of state prestige. For two decades, the Red Flag was not a car company in any commercial sense β it was a national symbol, a rolling proof point that China could match Western industrial capability. Production never exceeded a few hundred units annually.
The symbolism came at the cost of commercial viability. By 1981, with only approximately 1,540 vehicles ever produced across the brand’s entire existence, the State Council ordered production halted. The engineering teams were reassigned. The assembly line fell silent. Hongqi entered a dormancy that would last, in various forms, for thirty-six years. The brand that had carried premiers and presidents became a museum piece β famous, respected, and commercially dead.
Three decades of borrowed identity
FAW’s attempts to revive Hongqi began in the mid-1990s and failed with remarkable consistency. The strategy was always the same: take a foreign platform β an Audi 100, a Lincoln Town Car, a Toyota Crown β and rebadge it with the Red Flag emblem. Each attempt diluted the brand further. The Audi-based sedan earned the nickname “Little Audi” (ε°ε₯₯θΏͺ). The Lincoln variant found its way into taxi fleets. By 2006, Hongqi had become a signifier not of national prestige but of institutional decline.
The HQ3, launched that year on a Toyota Crown platform, sold roughly 500 units in its first twelve months. Five dealers served the entire country. The model could not clear the 5,000-unit threshold required to break even. The cumulative cost of these failures was staggering. FAW invested more than Β₯100 billion in Hongqi revival attempts between the mid-1990s and 2017 β a figure that included Β₯52 billion for the H7 flagship sedan alone, which in 2013 sold 2,534 units. That figure represented approximately one week’s output of Audi A6L sales in the same market. Hongqi ranked sixty-seventh among Chinese automotive brands. Its production line operated at ten percent capacity. Meanwhile, FAW’s own Audi joint venture was selling more than 500,000 vehicles per year in the same luxury segment that Hongqi was supposed to own β a parent company actively cannibalizing its heritage brand.
The organizational rot extended beyond product failure. In March 2015, FAW chairman Xu Jianyi was arrested on corruption charges β the third leadership change in eight years. The brand had no proprietary technology platform, no independent dealer network (Hongqi customers were sent to Audi and Toyota dealers for service), and no coherent product strategy. The company that was supposed to be China’s automotive crown jewel had become a cautionary tale of how state ownership could insulate failure from consequence for decades. By 2017, annual sales had collapsed to approximately 4,700 units. The German luxury brands that Hongqi was supposed to challenge β BMW, Mercedes-Benz, Audi β collectively sold more than 1.5 million vehicles in China that year.
Xu Liuping, who arrived as FAW’s new chairman on 2 August 2017, described what he inherited without euphemism: “Every year’s sales were just 3,000 to 4,000 units. In reality, the brand was existing in name only.”
The chairman who burned the furniture
Xu Liuping’s intervention was the most aggressive corporate transformation in Chinese automotive history. Within his first fifty days, he ordered all FAW personnel to “stand up and compete for positions.” Eight thousand employees were reassigned in a single week. Twenty-eight department heads were replaced. More than twenty senior managers were pulled from FAW’s profitable Volkswagen and Toyota joint ventures β the divisions that actually generated money β and redirected to Hongqi.
The strategy that Xu unveiled on 8 January 2018 at Beijing’s Great Hall of the People broke with every assumption that had governed Hongqi for three decades. The brand would no longer depend on borrowed platforms. It would no longer position itself as a government limousine that happened to be available to civilians. Instead, Hongqi would reposition entirely as “Chinese-style New Noble Exquisiteness” β targeting younger, commercially motivated consumers with its own proprietary technology and design language. Four product lines would span from mass luxury to ultra-premium. Seventeen new models would launch within five years. The sales target: 100,000 units by 2020 β a number that seemed delusional for a brand that had just sold 4,700.
The most dramatic signal came in September 2018, when Giles Taylor β the man who had designed the Rolls-Royce Phantom VIII, the Dawn, and the Cullinan β joined Hongqi as Global Vice President of Design. A Munich design center followed. The hiring of the most celebrated luxury automotive designer in the world sent an unmistakable message: Hongqi intended to compete with, not imitate, European luxury houses.
The commercial results arrived with startling speed. From 4,700 units in 2017, sales reached 33,000 in 2018 β a sevenfold increase in a single year. They broke 100,000 in 2019, surpassed 200,000 in 2020, and hit 300,000 in 2021 β the year Hongqi overtook both Lexus and Cadillac to become China’s fourth-largest luxury brand, behind only BMW, Mercedes-Benz, and Audi. The accessible H5 sedan (starting at Β₯160,000) and HS5 SUV proved that demand existed far beyond government garages. Chinese consumers who would never have considered the old Hongqi β with its associations of bureaucratic stiffness and borrowed platforms β were buying the new one in volumes that embarrassed the forecasts.
A dedicated dealer network, built from zero to 271 sites by 2019, gave the brand a commercial infrastructure it had never possessed. The experience was entirely new: dedicated Hongqi Experience Centers with showrooms designed around the brand’s heritage narrative, not shared Audi-Toyota service bays. For the first time in its sixty-year history, Hongqi had a direct relationship with its customers.
From parade ground to production line
The revival’s architecture rests on four product lines that span an almost inconceivable price range. The core lineup β H-series sedans and HS-series SUVs β anchors the Β₯150,000 to Β₯250,000 segment where volume lives. The H9 flagship sedan (Β₯310,000 to Β₯860,000) competes directly with the BMW 7 Series and Mercedes S-Class. The Golden Sunflower (ιθ΅θ±) ultra-luxury division β featuring the Guoli limousine at Β₯7.18 million β targets the market occupied by Rolls-Royce and Bentley. The Sultan of Malaysia owns one.
International expansion followed domestic scale. Hongqi made its European debut at the Paris Motor Show in October 2024 and now operates in 43 countries, with 82 European outlets through a partnership with Sweden’s Hedin Automotive group. Additional distribution agreements with Eurokars Group (Singapore), Samelet Group (Israel), and Metro Group (Thailand) anchor the brand across Asia and the Middle East. Overseas assembly plants in Kazakhstan and Belarus serve Central Asian and Eurasian Customs Union markets.
Russia has emerged as the second-largest market, with 11,253 units delivered in 2025 β up 56 percent year-on-year β filling a vacuum created by Western luxury brands’ withdrawal after 2022. For Russian buyers who once purchased BMW 5 Series or Mercedes E-Class sedans and now face restricted access, the Hongqi H9 offers a domestically familiar alternative with genuine luxury credentials. European pricing (β¬50,000 to β¬54,000 for the EHS7 SUV) positions Hongqi below BMW and Mercedes but above most Chinese competitors entering Europe, a deliberate premium play underwritten by Euro NCAP five-star safety ratings across the E-HS9, EHS7, and EHS5. The strategy is clear: Hongqi will not compete on price in international markets. It will compete on heritage, design, and the credibility that comes from being the only Chinese automotive brand with a sixty-seven-year lineage.
The paradox at 460,000
Yet the numbers that define Hongqi’s triumph also expose its vulnerability. Total deliveries reached 460,063 in 2025 β another record β but internal combustion models still generate 68 percent of volume. New energy vehicles accounted for 149,000 units, growing at 30 percent year-on-year but still concentrated in plug-in hybrids and fleet vehicles rather than the pure electric models that define the competitive frontier.
The electric division, rebranded as Tiangong (倩ε·₯, “Heavenly Craft”) in early 2025, has underperformed sharply. The EH7 sedan, Hongqi’s flagship battery electric vehicle priced between Β₯230,000 and Β₯310,000, has accumulated roughly 5,778 sales β a fraction of the Zeekr 007 and Tesla Model 3 volumes it was designed to challenge. In a market where BYD sells 4.27 million new energy vehicles annually and Xiaomi’s SU7 attracts 100,000 orders in its first year, Hongqi’s EV numbers are not merely disappointing β they raise questions about whether the formula that powered the ICE revival can work in a fundamentally different competitive environment. State backing and heritage carry weight with luxury sedan buyers. They carry less weight with EV buyers who evaluate range, software, and charging infrastructure.
The 1 million unit target originally set for 2025 has been pushed to 2028. FAW has invested in battery joint ventures with CATL and BYD, taken a Β₯3.7 billion stake in Leapmotor, poured Β₯3.6 billion into autonomous driving venture Zhuoyu Technology, and in December 2025 unveiled China’s first all-solid-state battery vehicle prototype. Chairman Qiu Xiandong, who succeeded Xu Liuping in a routine state-enterprise rotation in early 2023, has declared an “All In New Energy” strategy. Whether declaration translates into execution will determine whether Hongqi’s transformation arc completes a second cycle or whether the brand β having proved that a state-owned enterprise can achieve commercial scale β proves equally that heritage and government backing cannot substitute for the product-market fit that defines the EV era.