Wednesday, August 4, 2010

BYD cuts auto sales target by 25 pct in 2010

HONGKONG/SHANGHAI: Chinese car and battery maker BYD Co, backed by U.S. billionaire Warren Buffett, said on Wednesday Aug 4 it had cut its sales target by 25 percent to 600,000 autos this year due to capacity constraints.

Analysts had expected BYD, 10 percent owned by Buffett's Berkshire Hathaway, to revise down its target after the Chinese company's auto sales in June fell 21 percent from May.

"China's car market is still good in the second half although growth will probably not be as strong as the first half," said BYD spokesman Henry Li.

He said the company revised down its sales target from 800,000 units for 2010 mainly due to constraints in capacity.

The company sold 289,000 cars in China in the first six months of 2010, up 63.5 percent from a year earlier and exports rose 3.8 times to 8,000 in the same period, Li said.

BYD expected auto sales growth in China, the world's biggest auto market, to slow to about 20 percent this year from nearly 50 percent in 2009. But it said its own sales should nearly double.

Passenger car sales in the country in July rose 15.4 percent as the slow auto sales season settles in.

BYD shares were down 1.3 percent in morning trade in Hong Kong, trailing a 0.25 percent gain in the broader Hang Seng Index.

China's car market started to lose some of its steam in the second quarter after breakneck expansion in 2009, setting the stage for a more moderate growth for the rest of this year.

Most automakers saw their July sales growth slowing compared with previous months.

Ford Motor's China car venture saw its July auto sales falling 6.3 percent to 18,255 units. Toyota Motor said its China car sales climbed merely 1.0 percent last month.

"After a blistering hot 2009, we are seeing a return to more traditional sales patterns this year," Ford said in a statement.

"Traditionally, we would see July sales at about 90 percent of June, with August just slightly lower than July, before a September sales bump coming out of the summer season." - Reuters

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