Chinese automaker BYD has been slapped with a CNY2m (US$300,000) fine by Chinese authorities following apparent problems with land acquisition for extra capacity.
BYD is remaining coy as to why exactly it has been ordered to pay the penalty but said it had no plans to oppose the fine imposed by the Chinese Land and Resources Ministry.
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The land acquisition was to have been used to ramp up capacity but, in any case, BYD has revised down its production capability by around 25% as the Chinese rate of market growth slows.
“This illegal use of the land, officially we don’t have any comment on that,” a spokesman in BYD’s Shenzhen headquarters told just-auto. “Depending on our production schedule, we are trying to increase our capacity depending on our sales volume. We follow the decision by the government 100%. We agree with the judgement.”
The disputed land was due to be used for extra capacity from the beginning of 2012 and BYD will now plan alternative production. The spokesman noted precise expansion details were not yet forthcoming apart from a geographical update.
“Our first plant is to expand in Shenzhen and our second to expand is in Changsha,” he said.
“We are not worried about capacity – it has no impact on our operation – we have enough capacity for the coming two years.”
BYD noted “basic construction” had begun on the third plant until the Chinese central government stepped in but was confident it would meet production expectations.
“Our capacity this year will be 700,000 cars – we forecast to reach 800,000 but in the middle of this year we decreased to around 600,000 [units],” said the spokesman.
“People said our sales conditions were not going well but there is one very important reason which is our 2010 capacity is not 700,000 [units].
“We have the choice to go to continuous quality or mass production.”
The spokesman added that 2011 would see BYD target an output increase beyond 700,000 units.
