BYD discussing the purchase of Ford factory in Germany

Chinese carmaker BYD (Build Your Dreams) is reportedly in talks with Ford to purchase its Saarlouis factory in Germany.

Ford's Saarlouis plant – which is home to around 4600 employees and exclusively produces the Ford Focus hatchback and wagon – is set to close in 2025 following fading demand for small combustion-engined vehicles.

According to The Wall Street Journal, officials from Ford’s management in Germany are planning to travel to China next week, though discussions to sell Saarlouis to BYD are in the early stages, and may not eventuate.

AS BYD expands its operations across the globe, the purchase of Ford's Saarlouis plant could improve European supply of BYD's vehicles.

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However, it's understood Ford is gauging interest in the plant from around 15 potential investors, so the deal is far from done.

Ford is invested in launching a line-up of all-electric vehicles, aiming for EVs to take up at least 40 per cent of its global sales by 2030 and EV-only in Europe by 2030 where emissions regulations are more stringent.

In the interim, it’s focusing on higher profit SUVs, utes and light commercial vans.

Ford has already axed passenger vehicles including the Fiesta city hatch, Mondeo medium sedan and wagon, and the future of the Focus looks bleak with Saarlouis soon shutting down.

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Ford’s European division workforce is also dramatically shrinking across spare parts, internal combustion engine research, technical, and assembly as it cuts costs amid the major EV investment and the subsequent fewer labor and parts required for EVs.

Meanwhile, BYD Auto was founded in 2003 and is now rapidly expanding its electric vehicles globally, including in Europe.

It already has electric bus assembly sites in Hungary and France, but all passenger vehicles such as the Atto 3 crossover stems from its home country in Shenzhen.