China's BYD company, manufacturer of rechargeable batteries and automobile maker, has agreed to buy an ailing bus maker Hunan Midea Coach for RMB 60 million (US$8.8 million) as it plans to expand its product lines and capacity through a series of moves. Shenzhen-based BYD said it will acquire the necessary licenses to produce buses and coaches as part of the deal, which it expects to complete within 15 days.
BYD Co., the Chinese carmaker but also a main manufacturer of rechargeable batteries, backed as a company by Warren Buffett, agreed to buy bus and coach maker Hunan Midea Coach for 60 million yuan (some 7 million euro) as it plans to expand its product lines and capacity.
The Shenzhen, Guangdong-based company said it also entered an agreement to build a bus and coach plant at the bus-maker's headquarters in Changsha, Hunan province. The plant will have an annual output of 400,000 units - obviously not only buses and coaches - and be focused on developing "new energy models," according to a regulatory filing to the Hong Kong Stock Exchange.
The company said the acquisition would give it the necessary licenses granted by the government to build buses and coaches. "The inexpensive acquisition would provide BYD with the necessary government licenses to build buses and coaches," said industry analysts. The Shenzhen-based company has also said that it had planed to expand its existing plant in Xian, Shaanxi province to make 400,000 units of F3 cars, other new models and auto parts a year. The F3 is the world's first mass-produced plug-in hybrid and has been China's fourth-best selling car in the first half of the year.