Rising Electric Car Sales Power Warren Buffett-Backed BYD’s Bottom Line
Automaker BYD Co. Ltd. says the decline in its profitability will slow in the second half of the year, as it foresees “strong” momentum in its electric-car sales.
Backed by U.S. investment guru Warren Buffett, BYD predicted it would post a profit between 2.73 billion yuan ($392 million) and 3.13 billion yuan for the whole of 2018, a drop of as much as 33% compared to 2017, the company said in its latest financial report to the Hong Kong Stock Exchange on Monday. That figure is significantly lower than the 72% profit drop it recorded for the first six months of the year.
The upbeat tone comes as it foresees ongoing strong growth in the sales of new-energy vehicles — cars that use pure electricity, hybrid or hydrogen technologies. This indicates that market momentum will partly offset the impact caused by the government slashing relevant subsidies, a factor which BYD blamed for its poor performance in the first half of the year.
New-energy vehicle models “have accumulated a large amount of orders relying on their strong market competitiveness,” it said in the earnings report.
BYD posted a third-quarter net profit of 1.05 billion yuan, inching down 1.9% from the corresponding period last year, on revenue of 34.8 billion yuan. For the nine months through September, net profit plunged 45% to 1.5 billion yuan on revenue of 88.98 billion yuan.
The Shenzhen-based company, which also sells fossil-fuel cars and makes handset components, is China’s largest manufacturer of new-energy vehicles. Its new-energy vehicle sales rose to 143,400 for the nine months through September, exceeding its total sales for the entire year of 2017. That nine-month figure accounted for nearly 20% of the electric-car market’s total, according to the Association of Automobile Manufacturers.
On comparison, the overall auto industry in the country has lost steam, and is set to report its first annual sales decline in nearly two decades after years of frenzied expansion.
China has implemented a generous subsidy program since 2010 that boosted most electric-car makers’ revenues and profitability. However, Beijing began to make it harder to access the incentives early this year, with plans to completely phase them out by 2020.
Industry experts have warned the policy change could prove challenging for Chinese electric-car makers in the coming years.
Contact reporter Mo Yelin (firstname.lastname@example.org)
May 18 06:47 PM
May 18 06:44 PM
May 18 06:39 PM
May 17 06:44 PM
May 17 05:41 PM
May 17 03:53 PM
May 14 07:23 PM
May 14 06:24 PM
May 14 06:01 PM
May 14 05:57 PM
May 13 06:45 PM
May 13 05:41 PM
May 13 05:07 PM
May 12 07:30 PM
May 12 07:27 PM
- 1Beijing Sends Another Signal That Property Tax Reform Is on the Agenda
- 2Apple Peels Off China Market Share From Sinking Huawei
- 3TikTok Owner Drops Alibaba Cloud Outside China
- 4U.S. Audit Watchdog Moves Closer to Enforcing Law That Could See Chinese Firms Delisted
- 5China’s Central Bank Seeks to Calm Inflation Jitters
- 1Power To The People: Pintec Serves A Booming Consumer Class
- 2Largest hotel group in Europe accepts UnionPay
- 3UnionPay mobile QuickPass debuts in Hong Kong
- 4UnionPay International launches premium catering privilege U Dining Collection
- 5UnionPay International’s U Plan has covered over 1600 stores overseas