Chinese Car Maker BYD Sees 95% Tumble in First-half Profit
Amid stiff competition and the loss of a consumer car subsidy, BYD has warned that its first-half profit will shrink by about 95% amid stiff competition and the loss of a consumer car subsidy.
The company said that it expects a net profit between 121.1 million yuan ($18.7 million) and 363.2 million yuan in the first six months of this year, compared with 2.42 billion yuan a year ago.
BYD, backed by investment titan Warren Buffett, said the decline was partly due to the removal of government car sales incentives, which were ushered in to cushion the impact of the worldwide economic downturn.
China's auto sector overtook the United States in 2009 to become the world's largest but it has lost steam after Beijing phased out the subsidies.
BYD also said the company's cellphone components division would be dented by a delayed order from its single largest client, which it did not identify, according to the statement posted to the Shenzhen Stock Exchange.
The bleak earnings forecast comes after BYD recorded an 84% drop in first-quarter earnings, with a 12% tumble in operating revenue during the same period.
Copyright Agence France-Presse, 2011
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