Wed, Feb 16, 2011 - Page 11 News List

BYD announces a 15% drop in sales last month

slowing down:Weak sales may put pressure on the carmaker’s stock, which ended 3.8 percent lower yesterday at HK$34.25, its lowest level in 19 months

Reuters, HONG KONG

Chinese carmaker BYD Co Ltd (比亞迪), backed by US billionaire Warren Buffett, reported a 15 percent drop in auto sales last month, partly due to production constraints, which could put further pressure on its stock.

The battery and carmaker sold 52,054 vehicles last month at the wholesale level, down from 61,215 units in the same month last year, the company said in an e-mail.

“The number certainly was unsatisfactory and continued to underperform its competitors,” said Galant Ng, an analyst at Haitong International Research (海通國際資料研究).

review

Ng said he would review and possibly cut his sales forecast of 700,000 units for the company this year after last month’s sales figure confirmed the weak sales trend had extended from the second half of last year.

BYD missed its revised sales target of 600,000 units and sold 519,805 vehicle in 2010 as its parts production and dealer network development could not match with the company’s fast expansion last year.

The weak sales may put pressure on the company’s stock, which ended down 3.8 percent yesterday at HK$34.25, the lowest in 19 months.

Analysts said growth of China’s auto market, the largest in the world, was expected to slow this year after sales increased more than 30 percent last year.

Rising fuel prices, the removal of government subsidies and tighter rules on new car registrations would temper demand.

up and down

Rival Geely Automobile Holdings Ltd (吉利汽車) sold 45,634 vehicles last month, up 4 percent from a year ago but down about 18.7 percent from December. Geely shares fell as much as 4 percent yesterday before closing down 0.8 percent at HK$3.76.

Both BYD and Geely underperformed SAIC Motor Corp Ltd (上海汽車), the largest car maker in China, which has sold 35 percent more vehicles last month from a year ago.

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