BEIJING: Chinese carmaker BYD, backed by US billionaire Warren Buffett, said net profit fell 33.5 percent year on year in 2010 due to intense competition and rising distribution costs. The company, in which Buffett's Berkshire Hathaway holds a nearly 10 percent stake, posted a net profit of 2.52 billion yuan ($384 million) last year, it said in a statement. That compared with 3.79 billion yuan in 2009, the statement said. BYD blamed the fall on "intense competition and the increase in selling and distribution costs during the year", which soared to 2.18 billion yuan from 1.49 billion yuan in 2009 as it consolidated its sales network. Full year revenue increased 18.3 percent year on year to 46.69 billion yuan, it added. Looking forward, the company expects China's auto market to "maintain a stable growing trend" on strong domestic demand and improving exports, despite the government withdrawing incentives for small-engine car purchases.
Auto sales in China overtook the United States in 2009 to make it the world's largest car market and it hit a new record last year, rising more than 32 percent to 18.06 million units sold. Last year, BYD's car sales in China hit 519,800 units, up 15.9 percent from 2009 but 13 percent below its target of 600,000.
The Shenzhen-based company, which began as a manufacturer of rechargeable lithium-ion and nickel batteries, fell into the international spotlight when Buffett bought a 9.89-percent stake in it in 2008 for $230 million. At one of the events last year to endorse the company, Buffett described BYD as a "young and energetic" company, and said he believed it would play an important role in the future of new energy technology.
Comments
Comments are closed.