Beiqi Foton to acquire minibus plant for 9.3 mln yuan

Shanghai, June 10 (Gasgoo.com) Beiqi Foton Motor Co, China's biggest maker of commercial vehicles, plans to buy an affiliate's factory for 9.3 million yuan ($1.34 million) to ensure the capacities of minibuses and minivans in Foton's vehicle lineup.

Beiqi Foton will also take on 498 million yuan of debt from Beijing Foton Environmental Protection Dynamics Co. as part of the deal, the truck-maker said in a Shanghai Stock Exchange filing late last week. The plant, which now makes View minibuses and MP-X minivans for Beiqi Foton, has an annual production capacity of 100,000 vehicles. The buying out is intended to boost the production capacities of View minibuses and MPV-X vans for the truck-maker.

While continuing to focus on the truck and commercial vehicle market, Beiqi Foton's parent company, Beijing Automotive Industry Holdings, is looking to move back into passenger car production and declared the intentions at the 2008 Beijing auto show in April when it unveiled three sedans, two SUVs, and one hybrid. It has stated that it will release eight vehicles over the next five years.

The acquisition of a minibus facility will allow Beiqi Foton to integrate the large resources of light vehicle production and capture an even greater slice of the Chinese vehicle market in the coming years. With the setting up of its complete vehicle lineup, Foton will also better coordinate its R&D (research and development), production and sales and reduce its management costs.