BYD to make green-energy buses as part of 6b yuan expansion plan
Mainland battery and electric carmaker BYD has unveiled a plan to build two vehicle plants and expand into alternative-fuel bus production, which analysts estimated could involve a total investment of six billion yuan (HK$6.81 billion).
BYD, partly owned by Warren Buffett's Berkshire Hathaway, said yesterday it had agreed to buy Hunan Midea Coach Manufacturing, which has licences to produce buses and coaches, for 60 million yuan.
At the same time, the Hong Kong-listed firm said it planned to build a plant in Changsha in Hunan province and another in Xian in Shaanxi province, both capable of producing 400,000 vehicles a year, as well as components. BYD has an existing plant in Xian.
The company said the Changsha plant would be involved in the manufacture of new-energy buses and coaches as well as minibuses and vehicle components.
The Xian plant will mainly produce its F3, the company's most popular car.
BYD did not give any cost figures but the Changsha Evening News cited a BYD manager of the Changsha project as saying it would invest at least three billion yuan in the plant with annual output worth 30 billion yuan within three years.
Based on that, analysts said the two plants could cost a total of six billion yuan. They expected BYD to fund the projects from the proceeds of its A-share initial public offering.
Earlier this month, BYD revived a plan to float shares on the stock exchange in Shenzhen, where the company is based.
BYD said it planned to sell as many as 100 million A shares. Based on BYD's Friday closing price of HK$41 in Hong Kong, it would raise HK$4.1 billion.
Proceeds from the share offer will be used for the production of lithium ion batteries and solar energy batteries, vehicle development as well as expansion of its car accessories and parts business, it had said.
BYD, a key player in the hybrid car market, launched the first commercial dual-mode electric car, known as the F3DM, in December last year.
Vehicle sales more than doubled to 176,814 units in the first half from a year earlier.
Wang Chuanfu, the president of BYD, said earlier the firm aimed to more than double car sales this year to 400,000 units.
Mr Buffett bought a 9.9 per cent stake in BYD for HK$1.8 billion in September last year.
