BYD Co (比亞迪), the Chinese automaker backed by Warren Buffett, expects sales in the world’s largest car market to recover from this month after the company missed targets last year.
BYD may benefit as consumers traditionally buy more vehicles ahead of the Lunar New Year holiday, which begins on Feb. 3, BYD chairman Wang Chuanfu (王傳福) said at the North American International Auto Show in Detroit, Michigan.
Inventory levels at the -Shenzhen-based automaker are also now at “normal” levels after the company cut 100 dealers throughout China last year, he said.
The firm, maker of China’s best-selling F3 passenger car in 2009, faces competition from overseas rivals, including General Motors Co, Volkswagen AG and Honda Motor Co. BYD is under pressure as foreign makers introduce new, lower priced brands in the Chinese market, while Beijing ended tax incentives this month that have helped boost sales during the past two years.
BYD missed its sales target last year by 13 percent, selling 519,806 cars. The automaker fell short of the goal even after it cut the target by 25 percent in August from an earlier estimate of 800,000 units.
“Our original sales target was not quite practical and the market wasn’t as strong as expected,” Wang said yesterday in an interview.
BYD reduced dealers in China to match demand, he said.
BYD shares fell 1.43 percent to HK$41.25 by the close of Hong Kong trading. The stock dropped 40 percent last year, after surging more than fivefold a year earlier.
Vehicle sales at the automaker, 10 percent owned by Buffett’s Omaha, Nebraska-based Berkshire Hathaway Inc, fell 15 percent to 51,300 vehicles last month, even as domestic rivals, such as SAIC Motor Corp (上海汽車) and Dongfeng Motor Group Co (東風汽車), gained.
MidAmerican Energy Holdings Co, a unit of Berkshire Hathaway, bought 9.9 percent of BYD in September 2008.
BYD will bring its E6 pure electric cars to the US this year, Wang said on Monday, delaying a previous plan to begin deliveries last year. Fleet sales of the E6 will start at the end of this year, while retail deliveries will commence in the first quarter of 2012, he said.
BYD has been adding new models to its range of offerings as sales of its F3 sedan slows.
Sales of the F3, which is priced from 59,800 yuan (US$9,027), declined 6 percent in the 11 months to November last year compared with year-earlier period, according to JD Power.
Measures including consumption-tax cuts, subsidies for rural car buyers and incentives to trade in older models helped China’s industry-wide vehicle sales jump 32 percent to 18.06 million last year, helping China maintain its position as the world’s largest auto market for the second year.
China will raise the tax on vehicles with engines 1.6 liters or smaller to 10 percent from 7.5 percent from this month, the Chinese Ministry of Finance said on its Web site on Dec. 28. The tax was cut to 5 percent in 2009.
New local government measures restricting car ownership in Beijing and the expiration of sales tax subsidies “pose a challenge” to China auto demand this year, Wang said.
Beijing introduced policies on Dec. 23 to curb traffic congestion in the city.
Wang declined to provide a forecast for car sales this year, citing analyst predictions of a 10 percent overall industry wide growth.
ISSUES: Gogoro has been struggling with ballooning losses and was recently embroiled in alleged subsidy fraud, using Chinese-made components instead of locally made parts Gogoro Inc (睿能創意), the nation’s biggest electric scooter maker, yesterday said that its chairman and CEO Horace Luke (陸學森) has resigned amid chronic losses and probes into the company’s alleged involvement in subsidy fraud. The board of directors nominated Reuntex Group (潤泰集團) general counsel Tamon Tseng (曾夢達) as the company’s new chairman, Gogoro said in a statement. Ruentex is Gogoro’s biggest stakeholder. Gogoro Taiwan general manager Henry Chiang (姜家煒) is to serve as acting CEO during the interim period, the statement said. Luke’s departure came as a bombshell yesterday. As a company founder, he has played a key role in pushing for the
China has claimed a breakthrough in developing homegrown chipmaking equipment, an important step in overcoming US sanctions designed to thwart Beijing’s semiconductor goals. State-linked organizations are advised to use a new laser-based immersion lithography machine with a resolution of 65 nanometers or better, the Chinese Ministry of Industry and Information Technology (MIIT) said in an announcement this month. Although the note does not specify the supplier, the spec marks a significant step up from the previous most advanced indigenous equipment — developed by Shanghai Micro Electronics Equipment Group Co (SMEE, 上海微電子) — which stood at about 90 nanometers. MIIT’s claimed advances last
CROSS-STRAIT TENSIONS: The US company could switch orders from TSMC to alternative suppliers, but that would lower chip quality, CEO Jensen Huang said Nvidia Corp CEO Jensen Huang (黃仁勳), whose products have become the hottest commodity in the technology world, on Wednesday said that the scramble for a limited amount of supply has frustrated some customers and raised tensions. “The demand on it is so great, and everyone wants to be first and everyone wants to be most,” he told the audience at a Goldman Sachs Group Inc technology conference in San Francisco. “We probably have more emotional customers today. Deservedly so. It’s tense. We’re trying to do the best we can.” Huang’s company is experiencing strong demand for its latest generation of chips, called
GLOBAL ECONOMY: Policymakers have a choice of a small 25 basis-point cut or a bold cut of 50 basis points, which would help the labor market, but might reignite inflation The US Federal Reserve is gearing up to announce its first interest rate cut in more than four years on Wednesday, with policymakers expected to debate how big a move to make less than two months before the US presidential election. Senior officials at the US central bank including Fed Chairman Jerome Powell have in recent weeks indicated that a rate cut is coming this month, as inflation eases toward the bank’s long-term target of two percent, and the labor market continues to cool. The Fed, which has a dual mandate from the US Congress to act independently to ensure