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October 27, 2009

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Home » Business » Auto

Beiqi Foton's plan to be in new battery firm boosts its shares

SHARES of Beiqi Foton Motor Co jumped yesterday after the firm announced that it will be part of a new company which aims to be the nation's biggest producer of vehicle lithium battery.

The commercial vehicle maker said it plans to invest 10 million yuan (US$1.5 million) for a 10 percent stake in the new company that produces batteries for new energy vehicles, according to its statement to the Shanghai Stock Exchange.

The new battery company, whose registered capital is 100 million yuan, has another three shareholders including Foton's parent, Beijing Automotive Industry Holdings Co with a 24 percent stake, and two battery technology companies.

"The investment is a major move to gear up the industrialization of new energy vehicles in Beijing," Foton said in the statement. "It would support our strategy to develop new energy commercial vehicles with advanced technologies and stable battery supply."

Shares of Beiqi Foton rose 2.7 percent to 18.19 yuan yesterday while the Shanghai Composite index closed 0.06 percent higher.

China has been boosting investment and offering incentives to accelerate the development of fuel efficient and eco-friendly vehicles.

Battery and electric car producer BYD Automobile Co Ltd has just opened a new plant to make batteries in Huizhou, Guangdong Province, in September.

The car maker, which is backed by billionaire Warren Buffett, said the 5 billion yuan plant will enable it to mass produce electric cars.

BYD is also expanding the production of its lithium battery membrane.

Beiqi Foton has contracts to supply 450 hybrid buses to Beijing. China hopes to have 500,000 green cars on the roads by 2011.


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