BEIJING — A little-known U.S.-based engineering and design company said it plans to invest 10 billion yuan ($1.41 billion) to make sports cars with 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, Changchun in 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 an automotive solutions provider focused on the China auto market, its website shows.
It launched a company in Shanghai’s free trade zone in April 2019 with registered capital of 1 million yuan ($141,281), according to a filing with 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 restructurings over the decades, falling out of favor in the 1980s and now enjoying a revival as the government promotes home-grown brands.
FAW aims to double annual Hongqi sales to 200,000 this year and reach 1 million by the end of the decade. Its plans for the brand include a 21-model lineup by 2025.