Build Your Dream Automobile Company, Ltd. (BYD) has reported that first half profits fell by an astounding 89 percent year-to-year due to lower sales, higher labor and raw materials costs and tougher competition.
On Friday, the Chinese auto and battery maker backed by American investment icon Warren Buffet reported first-half profits of 275 million yuan, or about $43 million. Sales for the first half of the year fell to 220,131, down 23.4 percent from the previous year. Revenue from the company’s automotive sales also fell to 9.5 billion yuan, down 26.5 percent, while its gross profit margin decreased to 16.2 percent — a decline of 10.7 percentage points.
BYD saw steep declines in the sales of its flagship models, including the F6 mid-size sedan, the F3 compact and the F0 sub-compact models after Beijing suspended its tax incentive programs for new vehicle buyers.
Sales figures for BYD’s alternative-energy models, including the F3DM dual mode, rechargeable electric / gas rechargeable vehicle, were also disappointing. According to J.D. Power and Associates, a mere six e-6 5-seat, all-electric, crossover models were sold during the first six months of this year.
Despite the abysmal sales figures, BYD said it is committed to “continue to propel the progress of the commercialization of electric vehicles and further increase the market expansion efforts for new energy automobiles in the domestic and overseas markets.”
BYD’s e6 and F3DM plug-in electric hybrid cars and its K9 electric passenger bus are currently in use in test programs in the company’s home market as well as a number of European countries including Spain and Denmark.
In a statement, BYD said that sales of its newer models, including the G3 and L3 compact models and S6 Sport Utility Vehicle, were up during the period but did not provide specific details.
The company plans to launch a luxury version of the G6 later this year. The model will feature a turbocharged direct-injection gasoline engine and a dual-clutch transmission.
BYD’s corporate headquarters are located in Shenzhen, in southern China. In addition to its automotive concerns, BYD manufactures rechargeable batteries and handset components for various mobile phone makers.
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