The Red Flag car is hard to save at the provincial level

"The red flag C131 will be mass-produced before the Party's 18th National Congress!" This has become the political mission of FAW Car.

FAW Car Red Flag Division staff told the "Investor Daily" reporter that the current C131 has a prototype car, is in the trial stage, the production line has been completed, not mass production. According to the company's plan, C131 must achieve mass production before the 18th National Congress of the Communist Party of China.

For the recent news that the "Red Flag C131 will become the standard car for provincial and ministerial cadres," Gao Yuan, director of the News Center of FAW Group, told the "Investor" reporter: "I am very happy with this rumors! Red Flag is a representative of independent brands. The C131 is independently developed by FAW and its performance and quality are in full compliance with the requirements of provincial-level vehicles."

FAW will lock the red flag C131 in the provincial-level cadre car, in fact, is trying to take the opportunity to return the red flag brand. However, industry insiders told the “Investor Daily” reporter that the total number of provincial and ministerial level officials is around 3,000. The sales volume of the red flag C131 is minimal, and the investment cost of nearly 1.8 billion yuan is hard to recover. Its most important role is to reawaken Chinese people's red flag complex and build up their high-end image. In terms of actual benefits, it is either "name more than profit."

With C131 returning the red flag to prepare for multiple models, it is currently being reported that C131, which is standard for provincial and ministerial level officials, will be the chip of the Red Flag brand.

Investor News reporter learned from insiders of the Red Flag Division of FAW Car Co., Ltd. that the company's vehicle R&D platform is one where the C131 is used in the H-platform of high-grade cars, and the other is the L-platform targeting luxury cars. C131 is positioned as a provincial ministerial car, while the other L platform will launch a national and sub-national car.

It is reported that another new model planned is one level lower than the inspection vehicle and one level higher than C131. In addition, the red flag brand may also launch a van.

"Investors" reporter learned from an engineer at FAW Car Co., Ltd. "C131's current sales strategy is only at the provincial and ministerial level, and it is expected to become the party's 18th Congress car this year. Sales.” Gao Yuan, director of FAW News Center, told the “Investors” reporter: “Hongqi will launch a series of models covering high-end, mid-range, etc. There will be both official vehicles and private car markets.”

It can be seen that FAW Car is determined to rejuvenate the Hongqi brand.

The Hongqi sedan was named "China's first car" in 1958. It was also regarded as a symbol of a local brand. However, it had previously stopped production twice. In the 1980s, the "Red Flag" was discontinued because of its large fuel consumption, high costs, and low production. In the 20 years since the red flag was introduced, a total of 1,540 red flag vehicles have been introduced. After the 1990s, FAW, with its good cooperation with foreign auto giants, successively launched products such as Mingshi, Century Star and Hongqi Golden Age, but these models have not been successful.

However, after the 1990s, FAW, with its good cooperation with foreign auto giants, has developed a variety of products with all intellectual property rights. On October 18, 1998, the company was renamed the Hongqi 98 Rising Star Sedan and equipped with an improved 4GE engine. In 2002, 98 new star cars that had passed more than 100 technical improvements and were equipped with Nissan QG18 engines were officially renamed Red Flag Mingshi. After 2008, Hongqi Shengshi was launched, but it was basically in a semi-discontinued state. Currently, there is only a red flag Shengshi stock car sold, and the sales volume is almost zero.

For the past year, FAW Car has been red-lighted both in terms of sales volume and profitability. The Hongqi brand belongs to the independent brand of FAW Car and becomes the new hope of FAW Car.

In 2011, FAW Car sales reached 241,400 units in the year, a decrease of 10.5% from the same period in 2010. In addition, the company expects net profit attributable to shareholders of listed companies for the year to fall from RMB 1.86 billion in 2010 to RMB 0.37 billion to RMB 372 million, a drop of 80% to 98%.

FAW Car currently owns three brands of Red Flag, Pentium, and Mazda. In the past year, Pentium brand sales accounted for 40%, Mazda occupied 60%, and Hongqi brand was in production. As a brand new model launched by FAW Group, the C131 bears the heavy responsibility of rejuvenating the Hongqi brand.

In fact, the red flag C131 began preparations as early as 2010. On August 26, 2010, at the fourth meeting of the fifth session of the Board of Directors of FAW Car, the "Proposal on the Investment of Platform H 131 for H Platform" was proposed. The motion pointed out that it is necessary to invest 1.785 billion yuan for the R&D of C131 and plan to achieve 30,000 capacity in 2013.

Southwest Securities analyst Wang Jianhui told the "Investor" reporter that the biggest advantage of the Red Flag sedan is the brand. It is the most influential independent brand. Industry insiders told the “Investor Daily” reporter that since the 1979 Red Flag was released, it has not really entered the homes of ordinary people, and it has been shut down twice before and after, which is mainly because the Red Flag has not found its own position, and there is no core autonomy from appearance to technology. breakthrough. To succeed, Hongqi must make its own brand characteristics.

C131 has not yet been listed. The production of the car with the status of "provincial-level cadre standard car" means that the Hongqi brand car will take off for the third time. However, Wang Jianhui said that the red flag revival must first make a fuss about the brand culture. The key is to turn the red flag of the Chinese people into real purchasing power.

The sales of lock-level ministry at least lost 700 million Hongqi C131 to the provincial-level cadre car, hoping to revive the Hongqi brand. FAW Car's investment in the C131 project is nearly 1.8 billion yuan.

According to insiders, the model is currently only for provincial-level officials. "If you only use cars at the provincial and ministerial level and cannot open the private car market, then the 1.8 billion yuan investment in the Hongqi C131 project will inevitably suffer losses." Southwest Securities analyst Wang Jianhui told the "Investors" reporter. This means that the red flag ministry-level car "makes money and earns money."

In fact, the Red Flag sedan has always existed as a "government car" in China. Since its inception in 1958, it has been the driver of the state leaders. The red flag has never got rid of the "official car" hat. Staying deep within the hearts of the people should be the red flag parade that is still active in National Day activities.

At that time, the Red Flag sedan was entirely produced by hand and the output was low. Therefore, at that time, there were vice presidents, vice premiers, vice chairmen, vice chairmen of the Chinese People's Political Consultative Conference and deputy president of the Supreme Court. Even in diplomatic activities, the “Red Flag Car” has become one of the highest courtesies for foreign dignitaries to visit China.

It is precisely because of this that the Red Flag is not only China's first self-produced automobile brand, but also the "official car" that symbolizes the highest glory. Since its inception, Hongqi has always been associated with party and government official vehicles.

In view of the long-running "car blood" of the Hongqi sedan, the C131, as a C-class luxury sedan derived from the H-class H-platform of Hongqi, seems to be no accident. However, a reporter from “Investor Daily” consulted the “2012 Catalogue of Selection of Official Vehicles for Party and Government Organs” published by the Ministry of Industry and Information Technology (Consultation Draft) and found that Hongqi cars are not listed. In fact, the official vehicles referred to in this new catalogue only include general official vehicles and law enforcement duty vehicles, and do not include leading cadres, special technical vehicles, and other vehicles.

Gao Yuan, Director of FAW News Center, told Investor News: “The C131 is completely independent research and development by FAW, and its performance and quality are in full compliance with the requirements of the provincial and ministerial grade cars.” He explained to the reporter that the list was published in 1.8 With a displacement of 180,000 yuan, the Hongqi sedan is not in this area and it is not included in the list.

According to the current regulations, the special provincial ministerial-level cadre car is a small car with a price of less than 450,000 yuan, the vice ministerial level is within 350,000, and the displacement of both grades is 3.0 liters or less. Positive ministerial cadres enjoy special vehicles, and vice ministerial cadres are not equipped with special vehicles according to strict regulations, but they have “relatively fixed working vehicles”.

According to this, it can be concluded that the maximum price of the red flag C131 is 450,000 yuan, which is only at the provincial or ministerial level. According to relevant media reports, it has been conservatively calculated that the ministerial cadres of the central government (excluding the National People's Congress and the National Committee of the Chinese People's Political Consultative Conference) should have more than 100 people, and there are more than 95 provincial and ministerial cadres at the local level. This means that there are about 200 provincial and ministerial officials. Even if these 200 people purchased the Hongqi C131 with the highest price of 450,000 yuan, the total purchase amount was only 90 million yuan, accounting for only 5% of the 1.8 billion investment.

If you want to occupy the sub-provincial-level procurement share, the red flag C131 is priced at up to 350,000 yuan. In accordance with the previous calculation of the People's Network, the units at or above the provincial level are: directly under the State Council, directly under the Central Government, the National People’s Congress and the Political Consultative Conference, the CPC Central Committee and the Democratic Party, the provincial party committees and the National People’s Congress, vice provincial and municipalities, etc. Procuratorates, national key universities, and social organizations counted a total of nearly 3,000 officials at or above the sub-provincial level in the country. This means that even if all of these sub-provincial-level cadres purchased C131, the maximum sales would be 1.05 billion yuan.

A 40-year-old automotive industry researcher told reporters: "Middle-aged people like me who have driven red flag cars and have a lot of affection for the red flag brand are also the backbone of buying cars from the perspective of purchasing power." He said that the red flag car is the top two In the second round of discontinued production, the private car market was not opened and the purchase of official vehicles was limited. Red flag revival or to tap the brand value, open the private car market.

The technology completely self-doubtly doubts that the red flag is coming back this time. In the 2012 official car procurement catalog announced recently, all of the selected brands are self-owned brands. The biggest advantage of Hongqi is the special status of "the first car of its own brand".

Speaking of this new C131 model, neither the FAW Group nor the FAW Car Co., Ltd. is proud to report to the “Investor Daily” reporter: “It is an independent brand and is completely developed by FAW.” The staff of the Red Flag Division made it clear that this The car was brewed 3 years ago and researched and developed two years ago. The engine is from the second engine plant of FAW Car Co., Ltd. The property rights and patents are completely autonomous.

However, looking back at the past performances of the “caravans” of the Red Flag sedan, people can not help but secretly doubt this “full autonomy”.

Back in 1958, FAW hand-manufactured the first red flag sedan, which was later modified by trials. By May 1959, it had the first true red flag sedan CA72. This car was called "China's first car," when the communist production of 10, the red flag brand has become the first local brand. However, in fact, this model is based on the 1955 model Chrysler limousine.

Since then, China FAW began to learn and explore, and continuously develop new models. Of course, plagiarism in technology is inevitable. In 1966, FAW produced a three-row high-class car Red Flag CA770. The first batch of only 20 vehicles was exclusively used by the central leaders.

However, it cannot be avoided that, at the technical level, the red flag has not completely escaped the traces of “shanzhai”.

From 1966 to 1968, Hongqi successively designed and produced three kinds of three-row seated limousines such as the CA770, and the CA771 double-row seated limousine. Until the 1980s, the "red flag" was discontinued because of its large fuel consumption, high cost, and low output. Until then, a total of 1,540 Red Flag brand cars have been produced in the country in more than 20 years. History gives the red flags two labels "autonomous" and "high-end."

In the 1990s, FAW developed a number of products with full intellectual property rights through good cooperation with foreign auto giants. During this period, the "Red Flag" and "Little Red Flag" products were formed. "Little Red Flag" is FAW's use of the chassis and shape of the Audi 100, coupled with Chrysler's engine technology "synthetic" and later renamed the 1998 Red Flag 98 Nova, equipped with improved 4GE engine. At the same time, FAW also through the joint development with the United States Ford, in November 1998, the "Da Hong Qi" CA7460 limousine officially off the assembly line. The car uses a 4.6-liter V-shaped eight-cylinder Ford 462 engine, bearing the stigma of American cars of that era.

Red Flag Century Star went public in 2000. Century Star borrowed from the technology of German models, using the chassis of the Audi 200, equipped with Nissan 2.0-liter V6 engine. In 2002, 98 new star cars that had passed more than 100 technical improvements and were equipped with Nissan QG18 engines were officially renamed Red Flag Mingshi. The reference price at that time was RMB 149,800. Two years later, Red Flag Century Star put on a 2.4-liter displacement engine to market. The technical reference for the red flag vehicle of this period was transferred from the US Department to the German system.

In 2009, Red Flag was formally listed. The car's engine, transmission, and chassis all come from Japan's Toyota Crown 12 generations, and its appearance is exactly the same. At present, the red flag prosperity car is the only red flag sedan sold, but it is widely criticized for its technical Japanese genes. Moreover, according to the data released by Sohu Automobile, its sales volume was only 2 in 2011, and it can be seen that the Hongqi brand exists in name only.

Whether it is the German, American, or Japanese cars, the use of technology has made the name of the independent brand of the Hongqi sedan seem to be “not enough.” This time, Red Flag has made a comeback with C131 and lost money as a provincial-level cadre car, which is intended to reshape the image of high-end brands. FAW Group has especially emphasized the "completely independent research and development" of the Hongqi sedan and is also aimed at maintaining the "golden name" of "China's first car." sign.