FAW Car to sell luxury brand unit

Big losses suffered by the flagship Hongqi maker prove to be unsustainable for the listed company

FAW Car Co Ltd plans to sell its Hongqi business, known for the Red Flag limousine used by Chinese political leaders, to its controlling parent automaker - hoping to reverse its $127 million loss by the end of the year.

"Hongqi, as a luxury brand, is in its introduction stage, and the lineups have not realized economies of scale," the Shenzhen bourse-listed passenger car company said on Monday. "The company's profitability was influenced to some extent and the development costs forced the company to shoulder certain pressures."