On Friday, the network posted news that BYD Auto, its own brand, is in talks with Sanxiang Bus, which has suspended production for nearly a year, and reached an initial purchase agreement. Under the cooperation of the Changsha Municipal Government, BYD may wholly acquire Sanxiang Passenger Cars and plan to build BYD's domestic tertiary industry base in Changsha. The base will build a domestic first-class new energy passenger car plant and parts and components supporting base. Both parties will formally sign an asset transfer agreement in the near future. As soon as the news came out, it immediately aroused strong reactions from the industry. Some people questioned: What is BYD's desire to acquire a bus factory? Or is the brand strategic layout needed?

Loss of performance in passenger cars operating for 3 years

Where is the Sanxiang passenger bus in the United States? According to the relevant information, since 2004, the domestic appliance giant crocodile has begun its involvement in the automobile manufacturing industry, and has successively acquired the first bus manufacturer in southwest China, the Yunnan Coach Factory and the Yunnan Aerospace Shenzhou Automobile Co., Ltd., and has owned 54 years. The historical "Hunan Sanxiang Passenger Car Group Co., Ltd." three companies. In August 2006, the new Changsha base of 255 mu of beautiful passenger cars was completed and put into production. After the integration and adjustment of resources, Midea’s beautiful passenger car company has 10,000-passenger buses and special chassis manufacturing capabilities. It is currently the most complete passenger car industry, the most advanced facilities, and the largest one-time investment in professional vehicle manufacturing. It is also one of the few companies in China that has independent chassis design and production qualifications.

At the beginning, Midea Bus Company was aiming at “being the best professional vehicle manufacturer in China” and wanted to rank among the top three brands in the Chinese bus industry for three to five years. However, after three years of operation, Midea's wishful thinking in entering the auto industry failed and eventually stopped production due to sluggish market performance and suffered short-lived bad luck.

According to Zhu Yuanjie, vice president of Bus Marketing Co. of the United States, the performance of Midea’s passenger coaches has been unsatisfactory, and it took a hard time to tear apart a small hole in the Changsha bus market. Sales in other markets are even more bleak. At the beginning of this year, long-term financial and market operating pressures led to the forced disbandment of Changsha's passenger buses, the closing of factories, and the return of employees. Where does Midea's bus go, and related aftermath matters, is currently handled by Midea Group headquarters.

The government leads BYD to acquire Sanxiang in the United States

It took a lot of painstaking efforts to introduce Changsha into the United States and reorganize the assets with the Sanxiang Bus. Originally, Sanxiang in the United States could be expected to bear fruit in Changsha. Unfortunately, it was forced to suspend production three years later. As a result of this, the pressure on the Changsha municipal government is also very large. Therefore, under the government's matchmaking, BYD Auto began substantive negotiations with the Sanxiang of the United States.

In a summary report of the Changsha City Economic Commission's industrial investment promotion work in the first half of the year, the reporter saw such information: The city has made major breakthroughs in the automotive industry investment promotion this year. In May this year, Changfeng Automobile and Guangzhou Automobile Group reached a strategic cooperation framework agreement with Changfeng Motor as the cooperation platform. Immediately afterwards, Midea’s passenger car is currently about to conclude a transfer agreement with BYD.

Acquisition of bus factory is intended to be "the world's first"

BYD Auto has demonstrated its ambition since entering the automotive industry on the first day. According to BYD President Wang Chuanfu, BYD will be the first in China in 2015 and the first in the world in 2025. Then, in order to surpass its opponents in a short period of time, in addition to increasing technology research and development and product development including battery vehicles, BYD may be an important means of achieving its goals.

According to BYD’s relevant sources, last year they began to pay attention to the beautiful Sanxiang buses. Apart from the Changsha City government officials who personally went to Shenzhen to negotiate with them, they also dispatched high-level individuals to Changsha for field visits and confidential discussions. Just on the 8th of this month, BYD's all-rounder was also in Changsha and the person in charge of Sanxiang in the United States to negotiate.

According to the reporter's understanding, the purchase prices negotiated by the two parties have not been the most

Finalized, but has basically reached an agreement for intent to purchase, and is doing final asset assessment procedures. Since both parties are listed companies, the acquisition will involve a series of equity, debt and debt matters, which will take a relatively long time.

Invest 2 billion to build the third domestic production base

As a young car manufacturer, BYD's development speed is indeed remarkable, and the gold product F3 continuously surpassed Jetta, creating the “F3 phenomenon” in the automotive market. In particular, since the beginning of this year, despite the financial crisis, sales in the first half of the year have risen sharply again, sales have soared by 176% year-on-year, nearly 110% higher than the growth rate of the industry, and deserved to be the fastest-growing car brand in the first half of the year.

What is the resource of Sanxiang in the United States that is rapidly developing BYD? After the acquisition, what plans are there? According to sources from BYD, the passenger directory and chassis production qualification of the Sanxiang Bus in the United States can help BYD realize the dream of a new energy bus. At the same time, after the acquisition, BYD will gradually improve its product structure and achieve the strategic layout of the brand's Midwest.

Although the two parties have not yet discussed the good prices, BYD has formulated the latest strategic plan for the Changsha base. After BYD Auto’s acquisition of the assets of Sanxiang Bus, the company plans to invest more than RMB 2 billion, and plans to build BYD's domestic tertiary industry base in Changsha. The base will build a domestic first-class new energy passenger vehicle plant base, and will produce 200,000 BYD F0 cars, vans and auto parts supporting bases with an output value of more than 10 billion yuan.

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