Chairman Mao Zedong’s favourite carmaker plans major electric expansion

Red Flag, the car of choice for Chairman Mao Zedong six decades ago, has evolved with the times and is now planning for an electrified future.

The marque will introduce 21 new models over the next five years, 18 of them electric, said Xu Liuping, chairman of the brand’s parent, at a Beijing event late Wednesday. Red Flag targets a doubling in sales this year to 200,000 cars, and wants annual deliveries to reach 1 million in 2030, he said.

State-owned China FAW Group Corp. developed the first Red Flag in 1958 and the sedans have since been used by political leaders from Mao to President Xi Jinping. FAW kicked off a rejuvenation effort for the brand after Xu took over as chairman in 2017.

“The global automobile industry is going through a great reshuffle and the fully open Chinese car market is becoming the most competitive one in the world," Xu said. “The Red Flag brand is becoming a benchmark for China’s high-end automobile industry and a role model for local brands."

To refresh its offerings, FAW in 2018 hired Rolls-Royce veteran Giles Taylor to oversee Red Flag’s design team. Taylor helped create vehicles such as the Phantom VIII and the Cullinan SUV for the British luxury marque.

Red Flag targets the premium segment of China’s car market, with its current models priced at approximately $21,000 to $66,000. FAW also makes cars with joint-venture partners including Volkswagen AG and Toyota Motor Corp.

Yet Red Flag is facing a tough market. Sales of new energy vehicles, which includes electric cars, plug-in hybrids and fuel-cell autos, have declined for five consecutive months in China after the government scaled back subsidies. Competition is also getting tougher, with Tesla Inc. starting local production and German brands BMW, Audi and Mercedes-Benz bringing out electrified models.