Foreign Minister Wang's decision to ride FAW Hongqi offers hope to Chinese own brand manufacturers

Gasgoo.com (Shanghai June 19) - Foreign Minister Wang Yi's announcement that he will ride in a domestically-manufactured FAW Hongqi limousine has created a stir in the Chinese automotive industry and caused FAW Car's share price to soar. On the heels of the announcement, reports have begun appearing that FAW Hongqi has 1,000 Hongqi H7s ready in its Beijing inventory to grant to various government ministries for use as official cars. The story was reported in a Beijing Evening News report appearing today; however, the paper made sure to point out that no specific details have been officially confirmed as of yet.

In a statement on the issue, China Association of Automobile Manufacturers Deputy Secretary General Luo Lei remarked that the Chinese government is finally beginning to take action on its promises to purchase domestically-manufactured vehicles. Last year, the Ministry of Industry and Information Technology released a list of models recommended for use by party officials. Not only did VW, Toyota and Buick fail to make the list, Audi, BMW and Mercedes-Benz models were also omitted. According to Mr. Luo, this shift in policy will provide a remarkable opportunity for own brand manufacturers to further develop into the luxury car segment, which is still dominated by foreign enterprises. Partially due to this new government attitude, A-share values of Great Wall Motor, BYD, Dongan Automotive and other automobile manufacturers increased over two percent today.

Furthermore, Mr. Luo elaborated on Hongqi's image in the country. Thanks to usage by prominent provincial officials, Hongqi is strengthening its brand in the country. This, combined with the brand's history of usage by government officials as early as the 1960s, has helped Hongqi make a resurgence. The Hongqi H7 (pictured), which made its market launch last month in Beijing, is playing a crucial part in this revival. The H7, which is available in five variants priced between 299,800 yuan to 479,800 yuan ($48,645-$77,851), is billed as a 'high-class transport for government officials and business executives'.

"No longer is this a slogan or recommendation in a file, Wang Yi's decision to ride [a own brand car] has replaced 'words' with 'actions'," Mr. Luo stated. "This will help support the Chinese people's [automobile] brands," Mr. Luo continued, adding that, "it is not only something for FAW Hongqi to be proud of, it will also give confidence to Chery, Geely, BYD and other own brand manufacturers to research and develop luxury vehicles." "Our domestically-manufactured luxury vehicles eventually achieve perfection."