BYD plans $600m-plus electric-bus plant in China YU NAKAMURA,...

BYD plans $600m-plus electric-bus plant in China

YU NAKAMURA, Nikkei staff writer
HONG KONG -- Chinese automaker BYD will open a new 4 billion yuan ($614 million) plant for electric buses and other electric vehicles as early this year.
The company announced the plans Monday for the plant in Taiyuan, Shanxi Province. It will be a key facility for electric vehicles, along with factories in Shaanxi Province's Xian, Hunan Province's Changsha, and Shenzhen in Guangdong Province, where BYD is headquartered.


The new plant will have an annual capacity of 5,000 electric buses, in addition to 5,000 special-purpose vehicles for construction and other applications. Such larger electric vehicles carry higher profit margins than electric passenger cars. BYD expects the new facility to generate annual sales of 15 billion yuan.
BYD's green-vehicle business, which covers electric vehicles and plug-in hybrids, already generates more than 20% of the company's overall sales. The market leader in this segment, the company will further expand operations with the new plant.
Beijing rolled out its "Made in China 2025" initiative last year -- an effort to upgrade Chinese industry by shifting the focus from quantity to quality. With the aim of making green vehicles account for a fifth of the auto market, the government has been introducing a series of subsidies to promote them. BYD hopes to capitalize on such programs.
Many automakers are sharpening their focus on green vehicles. In 2015, the Chinese auto market grew only about 5% amid a slowing economy. Meanwhile, sales of electric vehicles and plug-in hybrids more than tripled to 330,000 units. BYD sold more than 60,000 units, an all-time high.