Hongqi H7 sedan's 2013 sales bumpy

A Hongqi H7 sedan is pictured at the 2013 Chengdu Motor Show on Aug 30, 2013. [Hao Yan / chinadaily.com.cn]

FAW has sold about 3,000 Hongqi H7 sedans in 2013, barely touching the company's bottom line, China Business News reported Monday, citing anonymous sources at the company.

Hongqi has only utilized 10 percent of its capacity this year. Hongqi, having hundreds of units produced and sold each month, failed to surprise anyone in the first year after its revival.

An Tiecheng, general manager of FAW Group Corp, said the plant has an annual production capacity of 30,000 units.

Some people are dissatisfied with Hongqi's performance, but in order to protect a national brand, they are staying silent, sources said.

As a car with a price range of 299,800 to 479,800 yuan, the year's sale of Hongqi was only equal to BMW's sales in a period of three days, or Audi's two-day sales.

FAW invested 223.4 billion yuan from 2008 to 2012 on research and development, and a great proportion of that was on the R&D of Hongqi, according to Sun Guowu, FAW deputy general manager. FAW said that Hongqi H7 is the first independently developed high-end model, and its quality and performance are equal to other premium brands.

Hongqi began accepting the first H7 order in February 2013. On April 26, 2013, as an official vehicle, the Hongqi H7 was used to pick up French President Francois Hollande; On June 17, Wang Yi, the Chinese foreign minister, started using Hongqi H7 as his official vehicle.

Zhang Xiaojun, general manager of FAW sales, has been promoting the car to end-customers. The display and sales shops Hongguan, or red pavilion, were built in nine major cities including Beijing, Shanghai, and Guangzhou. According to the sources, the construction cost for each Hongguan was tens of millions of yuan, of which 80 percent was covered by FAW.

According to the FAW plan, from 2013 to 2015, R&D expenses for Hongqi brand cars will exceed 10.5 billion yuan. Hongqi's new high-end model L9 will be priced at about 4 million yuan.

However, Hongqi's major issues with services and sales channel are still there. Hongguan does not offer a service department, and the repair service has to rely on Besturn networks, FAW's mid- and low-end brand.

"That would mean a customer bought an Audi, but have to visit Volkswagen for repairs. Or bought a Lexus but service in Toyota shops," said well-known auto commentator Zhang Zhiyong.