In the first half of 2011, BYD Co.’s profit declined by 89% year-on-year to 275 million yuan ($43 million). The reasons cited were a drop in vehicle sales, fierce competition, and more expensive labor and materials.
The private Chinese company, which has an electric car partnership with Daimler AG, is backed by billionaire investor Warren Buffett. Its sales in the first six months fell by 23.4% to 220,131 vehicles compared to the previous year.
Its auto sales revenue decrease by 26.5% to 9.5 billion yuan and its gross profit margin fell by 10.7 percentage points to 16.2%. With the termination of the tax incentives by the government, sales plunged for BYD's mainstream models, including the F3 compact car, the F6 mid-sized sedan and the F0 microcar.
Meanwhile, sales of BYD’s alternative-energy vehicles, like the F3DM plug-in and the e6 electric car, stayed low. J.D. Power and Associates said that just six e-6s were sold for the January-June 2011 period.
But its new models like the G3 and L3 compact sedans and the S6 SUV had high sales increases. BYD expects to launch the high-end G6 compact sedan in the second half of 2011. The G6 will be BYD’s first product with a turbo direct-injection engine and a dual-clutch transmission.
Even with the limited sales of its environmentally friendly vehicles, BYD has promised to continue to push the “progress of the commercialization of electric vehicles” and to raise further the market expansion efforts for new energy automobiles in the domestic and overseas markets.