A Redflag H7 on display. [Photo: baidu]

Chinese luxury auto maker Redflag has announced plans to launch a low-end model to try to cater to the middle-class.

Redflag is launching a new model of sedan which is priced below 250-thousand yuan.

Redflag's parent company, FAW, has also announced plans to spend some 200-million US dollars to upgrade its Redflag H7 model.

The new model, which is powered by an 18-hundred CC Turbo engine, will not be retailed.

Instead, the company will produce the cars through pre-orders.

Redflag became famous in China for being the official vehicles of the Chinese leadership in the 50s and 60s.