Warren Buffett-backed Chinese carmaker BYD Co Ltd (比亞迪) slashed prices of five models by up to one-fifth, fueling concerns it would spark a price war in the lower segment of the world’s largest auto market.
BYD said the price cut was to gain market share, but analysts said it was in response to its weak sales in the past few months.
The company reported a 15 percent decline in sales last month, compared with a 16.2 percent increase in China’s overall car sales last month.
BYD, which sells some of the country’s cheapest cars, cut prices on its five best-selling models — the F0, F3, F3R, G3 and F6 — by between 3,000 yuan (US$456) and 15,000 yuan each.
The biggest cuts, of 10.3 percent to 19.3 percent, were for its G3 model, BYD said, adding that it hoped the first cuts in several years would lift G3 and F6 sales to more than 10,000 each per month.
Analysts say other automakers in China may follow suit by cutting prices of low-end cars.
“For the mid to high-end products, I haven’t seen any price wars but for the smaller segment, it most likely will face price competition,” said Jack Yeung, an analyst at BNP Paribas.
BYD shares have lost almost a fifth of its value this year after plunging 40 percent last year on lower-than-expected sales and as investors cast doubts on its high valuation fanned by Buffett’s support and hopes on its development of electric cars.
BYD’s price cut “may at least help volume, which may help market share and may help brand recognition, and probably may help build the network, but it is going to be very bad for investors,” said Scott Laprise, an analyst at CLSA.
Buffett visited BYD’s headquarters and plants in Shenzhen, Beijing and Chengdu last September to show his support to BYD chairman Wang Chuan-Fu (王傳福) and his company, which makes cars, batteries, solar panel and power storage systems.
However, weak sales and the delay in commercial sales of BYD’s SUV model S6 and electric cars on immature ecosystem continued to overcast its stock price.
Analysts say China’s auto sales growth is likely slow to between 10 percent and 20 percent this year as demand would be affected by the resumption of a 10 percent purchase tax, potentially new restrictive policy on car sales and the government’s moves to curb inflation.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day