Weak demand from private consumers leaves Hongqi H7 sales low

Hongqi H7, a Chinese luxury sedan model produced by the FAW Group, has reported sales of just 3,000 units since it hit the market, media reports said.

Only one-third of the total sales went to private consumers - the rest were mainly ordered by government officials, Xinhua reported last week.

In February, the company only managed to sell 74 units of cars, far fewer than its competitors, such as Audi A4L, which sold around 9,200 units in the month, the report said.

Hongqi cars are the first domestically produced Chinese passenger vehicles and were mainly aimed at high-ranking officials. The H7 model, which was designed to rival premium brands like Audi and BMW, hit the market in May 2013.

FAW has invested around 5.2 billion yuan ($839 million) to revive the Hongqi brand during the past two years, and the company has been upbeat about the brand's future - it said it will produce Hongqi-branded SUV models and compact cars in the future.

Experts noted that the company should first have a clearer plan about its target market, and that private purchases are crucial to a brand's success. But media reports said that the company had given up some H7 orders by private consumers in order to meet the demands of local governments.

Zhang Zhiyong, a Beijing-based auto analyst, noted that the price was also a reason that pushed away many private consumers, as they have many other options to choose from among foreign brands.

The Hongqi H7 comes with five different models, and is priced from 299,800 yuan to 479,800 yuan.

Experts noted that there is still a long way to go before the Hongqi brand can grow into a successful luxury auto brand and product quality is crucial.