CHANGESHA, Hunan – BYD (01211.HK), China’s largest rechargeable battery maker and an ambitious automaker, sign an agreement on July 24 to take over Midea Coach Manufacturing Co., Ltd. at a price of ¥60 million ($8.8 million) from its owner Midea Group, one of the largest home appliances manufacturers in China, according to a company press release.
Hunan Midea Coach
CHANGESHA, Hunan – BYD (01211.HK), China’s largest rechargeable battery maker and an ambitious automaker, sign an agreement on July 24 to take over Midea Coach Manufacturing Co., Ltd. at a price of ¥60 million ($8.8 million) from its owner Midea Group, one of the largest home appliances manufacturers in China, according to a company press release.
Under the agreement, BYD will pay cash for the entire equity assets of Midea Coach to take full control of the bus maker and turn it into BYD’s electric bus and passenger vehicle production base in Changsha, capital city of Central China’s Hunan Province. BYD plans to start initial production of new energy buses in 2010 and produce car models C3, C6 and F2 later, according to the company press release.
BYD will invest ¥3 billion during the first phase of the construction, which is set to begin in late September. The government of Hunan says BYD’s new base will be the biggest project in the region’s automobile industry.
Midea Coach was established by Midea Group in 2005 through acquisition of former Hunan Sanxiang Coach Co., a 54-year-old bus builder in Hunan Province. Midea Coach has two manufacturing facilities with one in Changsha and the other in Kunming, Yunan Province. Its products are mainly 5.8-13.7 meters city buses and coaches.
According to China’s newly released Automotive Industry Readjustment and Revitalization Plan, “newly built vehicle manufacturing projects or a new subsidiary assembly plant to be built in a different geographical location must be based on the acquisition of an existing vehicle manufacturing enterprise.” Through the acquisition, BYD will be automatically granted the permission by the government to manufacture buses and coaches.
BYD, which currently has two automobile manufacturing bases in China, sold 176,795 vehicles in the first half of this year, up 176 percent from a year earlier, according to CBU-Autostats. The Shenzhen-based company set a sales target of 400,000 units of automobiles for 2009, to be up 100 percent year-on-year.