BYD Co., the Chinese automaker backed by billionaire investor Warren Buffett, says its profit fell 89 percent year-on-year to 275 million yuan ($43 million) in the first half of this year because of lower vehicle sales, tougher competition and higher labor and material costs.
The private Chinese company, which has an electric car partnership with Daimler AG, sold 220,131 vehicles in the first six months, down 23.4 percent from a year earlier. Its auto sales revenue declined 26.5 percent to 9.5 billion yuan and its gross profit margin plunged 10.7 percentage points to 16.2 percent.
Sales of BYD's mainstream models, including the F3 compact car, the F6 mid-sized sedan and the F0 microcar, declined steeply during the period, which came after the expiration of government tax incentives for vehicle purchases.
Sales of the company's alternative-energy vehicles, such as the F3DM plug-in and the e6 electric car, remained minimal. Only six e-6s were sold in the first six months, according to J.D. Power and Associates.
In contrast to its older products, BYD's new models, including the G3 and L3 compact sedans and the S6 SUV, posted strong sales increases, the company said in a statement without providing further details.
BYD said it will launch the high-end G6 compact sedan in the second half of this year. The G6 will be the company's first product with a turbo direct-injection engine and a dual-clutch transmission.
Despite the limited sales of its green vehicles, BYD pledged to "continue to propel the progress of the commercialization of electric vehicles and further increase the market expansion efforts for new energy automobiles in the domestic and overseas markets."
At present, the company's F3DM plug-in hybrid, the e6, and the K9 electric bus have been used in demonstration programs in China and some European countries such as Spain and Denmark.
In addition to vehicles, BYD, of the south China city of Shenzhen, makes handset parts and rechargeable batteries for mobile phones.