BEIJING — A little-known U.S.-based engineering and design firm said it plans to invest $1.41 billion (10 billion yuan) 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. Its website says it has offices in Modena, Italy, in China and in New York.
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 favor 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.