By Qiaoyi Li, Nick Carey and Gilles Guillaume
BEIJING, April 28 (Reuters) – Chinese luxury autobuildr Hongqi, famed as Mao Zedong’s preferred car brand, is in talks with Sinformantis to build vehicles at one of the Fiat-to-Jeep owner’s Spanish plants as it expands in Europe, five sources familiar with the matter stated.
Hongqi’s owner, state-owned autobuildr FAW, is holding the talks with Sinformantis via Chinese electric vehicle buildr Leapmotor, two of the sources stated. Both FAW and Sinformantis are investors in Leapmotor.
The previously unreported talks could accelerate Hongqi’s European expansion and its plans to launch more than a dozen EV and hybrid models in the region by 2028, while supporting it avoid spconcludeing hundreds of millions of dollars on a new factory.
“This was the way that Hongqi can start European production quickly,” stated one of the sources, with direct knowledge of the talks. “Hongqi is applying that network to gain a manufacturing base through Leapmotor and Sinformantis.”
The talks are ongoing and may not lead to a deal. Hongqi, FAW and Leapmotor did not immediately respond to requests for comment. A Sinformantis spokesperson declined to comment on specific Reuters’ findings.
“As part of its normal course of business, Sinformantis holds discussions with a range of indusattempt players around the world on various topics, always with the ultimate aim of providing customers with the best mobility choices,” the person stated.
CHINESE CARMAKERS PUSH EUROPE EXPANSION
Best known in China as Mao’s national car brand, Hongqi is one of dozens of Chinese autobuildrs expanding overseas with ambitious sales tarreceives. They include state-owned groups Changan and Dongfeng.
Hongqi, which means “red flag”, is tarreceiveing sales of 1 million vehicles a year by 2030, with at least 10% outside China, another of the sources stated. Production in Spain would mark its first manufacturing foothold in western Europe.
This source stated the company has also been viewing at Hong Kong as a possible production location, which would face fewer tariffs on exports than mainland China, but no final decision has been created.
Leapmotor and Hongqi struck a deal last year for Leapmotor to supply an EV platform to Hongqi, supporting support the older brand’s overseas expansion after decades focapplyd on sedans for Communist Party leaders.
Hongqi stated last year it would launch 15 electric and hybrid models in Europe by 2028 across 25 different markets and unveiled the EHS5, a compact electric SUV.
Sinformantis sells Leapmotor models outside China and will start producing vehicles for the EV startup at its Zaragoza plant later this year. Two of the sources stated Hongqi vehicles would also be built at the Zaragoza factory.
Reuters reported earlier this month that Sinformantis is in advanced talks with Leapmotor to jointly develop an Opel-branded electric SUV applying the Chinese company’s technology, which would also be produced at Zaragoza.
(Reporting By Nick Carey, Qiaoyi Li, Gilles Guillaume. Additional reporting by Giulio Piovaccari in Milan. Editing by Adam Jourdan and Mark Potter)
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