The Ministry of Land and Resources in China has revealed that BYD Co. has been ordered to pay a fine of 2.95 million yuan ($442,000) and to give up seven factories after a dispute over land use in central China.
BYD, which is a Chinese carmaker partially owned by billionaire Warren Buffett's Berkshire Hathaway Inc., will have its factories in Xi'an, Shaanxi confiscated. Before this ruling, BYD had already been suffering due to declining domestic sales and scaled-back plans to sell electric cars in California.
In a separate report, BYD said that its auto sales in September fell in 25%, even as the deliveries of its rivals (including SAIC Motor Co. and General Motors Co.) have grown.
Yu Bing, an auto analyst with Pingan Securities Co. in Shanghai, said that this will “affect their capacity expansion in the medium to long term.”
Yu said that BYD has to boost their capacity now if it wants to be able to fill its production requirements in the next two to three years. BYD was the fastest- growing major carmaker in China last year. [via Bloomberg]