China's First Automobile Works Group Corp is going to revive its legendary brand Hongqi, or Red Flag - which in 1958 was China's first domestically produced car - by launching its luxury model H7 in October, said FAW Chairman Xu Jianyi.

"The Hongqi H7 will hit the market soon. It is still in the testing period," Xu was quoted as saying on Monday by Xinhua News Agency.

The new model will be Hongqi's first hybrid sedan with core technologies developed by the company itself, said Xinhua. The outer design of the H7 is in line with Hongqi's tradition of being elegant, grandiose and superior, FAW officials were quoted as saying.

According to the company's development strategy for the Hongqi brand, the H-series sedan will target China's booming high-end vehicle market, competing with German luxury brands Audi and Mercedes-Benz.

Xu Xianping, general manager of the company, said during the recent Beijing auto show that other than the sedan, the State-owned enterprise will develop four other vehicle types for the Hongqi brand, including two sport utility vehicles, a multi-purpose vehicle for business use and a mid-size limousine coach for ceremonies and parades.

The company said that it has already invested 5.2 billion yuan ($825 million) in research and development of the Hongqi brand. And it will plunge a further 10.5 billion yuan into enhancing the R&D capabilities of the Hongqi and expand its product portfolio, during the 12th Five-Year Plan (2011-15).

Born in 1958 as China's prime protocol car, Hongqi has been used by top national leaders like Mao Zedong and Deng Xiaoping at major celebrations, as well as to transport important foreign guests including then US President Richard Nixon during his ice-breaking visit to China in 1972.

However, the brand lost its shine when production was halted in the 1980s due to high fuel consumption and costs.

FAW tried to revive it in 1990s by resuming production using foreign technologies and rolled out new models over the past decade, but failed with quite low sales.

Statistics from the China Association of Automobile Manufacturers show that, although FAW has made a limited number of Hongqi cars for officials, no vehicles for private use have been sold since last August.

Although FAW has only started that Hongqi-branded cars meet all regulations required for official use, in response to Chinese media reports that China will start using Hongqi sedans again as limousines for officials at the level of minister and above, analysts said this suggests that FAW is reviving the brand in order to cash in on the golden opportunity offered by its official use.

In February, the Ministry of Industry and Information Technology included three Shanghai-brand car models in its new vehicle product list. The manufacturer, Shanghai Automotive Industry Corp, said that it has included Shanghai-branded models in its product plans for passenger vehicles, a clear indication of the revival of its Shanghai brand.

However, it did not outline a definite production timetable or other detailed information.

lifangfang@chinadaily.com.cn