BYD’s profit for the first half of 2012 fell by 94%, attributed to the drop in Chinese auto sales domestically and internationally. BYD, a Chinese car and battery manufacturer, is 10%-owned by American investor Warren Buffett. It estimates that overall losses for 2012 will be about 75% to 95%. BYD enjoyed the booming years of 2009 and 2010 but it struggled with the impact of the declining economic condition.
BYD’s net income fell from 275.4m Yuan (£27.4m) between January and June 2011 to 16.3m Yuan (£1.6m) for the same period in 2012. BYD said that its business is “fairly directly affected” by the shifting economic conditions domestically and overseas. The demand for BYD’s core businesses in key markets is affected by the future downward pressure on the international and Chinese economies.
Its performance is also affected to a certain degree. The surge in Chinese car sales, which earned it the title of the world’s biggest auto market in 2009, stopped in the middle of 2010 when the Chinese government discontinued its subsidies for buying a car. Another factor that made BYD’s status worse is its solar panel business, which incurred huge losses.