Beiqi’s New Plan Fails as Jinghua Turns to New Business
2009-06-01 Source：english.chinabuses.com
In early May 2009, Beijing Jinghua Bus Co., Ltd. (hereinafter referred to as Jinghua) received the official note from Beijing Public Transport Group, its majority stakeholder. According to the note, Jinghua is ordered to transform itself from a bus builder and distributor assuming sole responsibility for its losses and profits to a bus repair & service company upon the receipt of the note.
Before this, Jinghua and Jingtong, two bus builders in Beijing, were approved by related government agencies in Beijing to be transferred to Beijing Automotive Industry Holding Co., Ltd. Moreover, it was planned a joint venture (JV) would be set up by merging Dandong Huanghai Automotive Co., Ltd. (hereinafter referred to as Dandong Huanghai) and the well-performing assets of Jinghua and Jingtong, with Beijing Automotive Industry Holding Co., Ltd. taking up to 51% of the new company’s shares.
Given this, the arrival of the note signifies there is little hope to establish a new bus building platform by Beijing Automotive Industry Holding Co., Ltd. without well-established trademarks, available patents and equipment.
Some insiders reveal that Beijing Public Transport Group has been in disagreement with Beijing Automotive Industry Holding Co., Ltd. In addition, the business of the two companies is hard to coordinate due to the fact that they are from different industries. Despite of the unfulfilled plan, the note, however, is expected to generate some positive impacts on Beiqi Foton Motor Co., Ltd. (also known as Beiqi Foton), which is affiliated to Beijing Automotive Industry Holding Co., Ltd. After the transformation of Jinghua, Beiqi Foton will be at a vantage point to further expand its presence in the capital’s public transport market. In fact, the deal of 800 units of hybrid city buses reached between Beijing Public Transport Group and Beiqi Foton in late 2008 has already opened the curtain for the two companies’ further cooperation.
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