Chinese electric car and battery company BYD, in which a subsidiary of Warren Buffett-led Berkshire Hathaway Inc. (NYSE:BRK.A) (NYSE:BRK.B) owns 10 percent stake, announced worse than expected full-year results on Sunday.
The company’s net profits slipped more than 94 percent from 1.38 billion yuan in 2011 to just 81.38 million yuan (or $12.92 million) in 2012. Revenues skidded 4 percent to 44.4 billion yuan. The company suffered more than 1 billion yuan in losses from its solar operations.
Total auto sales in China, the world’s largest auto market, jumped 4.3 percent Y-o-Y to 19.31 million units in 2012. However, auto sales in the first two months of 2013 rose 15 percent in the country, fueling expectations of revival of the world’s largest auto market after two years of sluggish growth.
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In the same wave of optimism, BYD chairman Wang Chuanfu said he expects the company’s first quarter profits to rise 4-5 times as the company prepares to launch new models like Sirui. The company had posted a 27 million yuan profit in Q1 2012. Mr. Wang expects the figure to rise to 100-140 million yuan in Q1 2013.
Mr. Wang said the company expects the government to announce new subsidies for green vehicles by April or May. Without giving any details, he said the government is likely to extend the subsidy until 2015. Subsidies on green vehicles is the Chinese government’s effort to reduce emission and bring 5 million electric and plug-in hybrid vehicles on the road by 2020. The government subsidy expired in December 2012, so BYD shifted its focus on promoting the vehicles instead of launching new green vehicles.
The Wall Street Journal said BYD targets most of its vehicles in taxi industry. The company expects to triple the electric car sales in 2013 to 8,000 units, which include 2,000 buses.
BYD’s joint venture with German car maker Daimler AG (PINK:DDAIF) (ETR:DAI) (FRA:DAI) will launch its full-electric car Denza in H1-2014 in China. BYD also manufactures rechargeable batteries, solar panels and telephone handsets.