BYD to buy bus maker in Hunan, expand output

BYD Co., the Chinese carmaker backed by Warren Buffett, agreed to buy bus and coach maker Hunan Midea Coach for 60 million yuan ($8.8 million) 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 and be focused on developing "new energy models," according to a regulatory filing to the Hong Kong Stock Exchange today.

The company additionally agreed to expand its existing plant in Xian to make 400,000 units a year of automobiles including its F3 car, as well as new models and auto parts, according to the BYD statement. The F3 is the world's first mass-produced plug-in hybrid.

The automaker's shares more than tripled in Hong Kong this year as China's 4 trillion yuan government stimulus package lifted demand for the F3, the country's fourth-best selling car in the first half. The company last year agreed to sell about 10 percent to MidAmerican Energy Holdings Co., a unit of Buffett's Berkshire Hathaway Inc.

The company said the acquisition would give it the necessary licenses granted by the government to build buses and coaches.

BYD, China's biggest maker of rechargeable batteries, gained 0.7 percent to HK$41 as of close of trading on July 24 in Hong Kong.