(Bloomberg) -- China FAW Group Corp., the carmaker that developed the "Red Flag" limousine for Chairman Mao Zedong six decades ago, is working with a local electric-car company led by former BMW AG managers to revive the brand.
State-owned FAW is announcing on Friday an investment in Nanjing-based Byton, the startup formerly known as Future Mobility Corp., said Daniel Kirchert, one of Byton’s founders. The two companies are also discussing plans to cooperate in product development, manufacturing, supply-chain management and sales, Kirchert said.
FAW Group, which built the first "Hongqi" -- Chinese for Red Flag -- for Mao in 1958, kicked off a new round of efforts to revive the brand after Xu Liuping took over as chairman of the company last year. Xu aims to boost sales of the Red Flag brand 100 times by 2025 to about 300,000 units a year. Byton was founded by a team of veteran executives including Kirchert, the former head of Infiniti in China, and Carsten Breitfeld, the former project manager for BMW’s i8 plug-in sports car.
Byton, which in January unveiled a $45,000 electric SUV at the CES in Las Vegas, has been seeking a production permit from the Chinese government. The National Development and Reform Commission, which oversees new investments in the auto industry, halted a license program last year to rein in excessive capacity expansion. Teaming up with FAW Group would help Byton ensure meeting its own target of starting vehicle production next year.
“Red Flag is a good brand in the world with profound heritage,” said Kirchert, adding he used to have a 1958 Red Flag miniature model on his desk. “We have advantage in the field of electrification and FAW have abundant resources as well.”
Byton is tapping Contemporary Amperex Technology Ltd. for battery supply, and is working with Baidu Inc. on areas such as mapping and voice recognition, Kirchert said.
Byton is considering an initial public offering down the road, though hasn’t decided on a location, Kirchert said. Byton’s current financing round is under way and will exceed $400 million, he said.
©2018 Bloomberg L.P.
With assistance from Tian Ying