BYD, the Chinese battery and car maker backed by billionaire Warren Buffett, expects to return to growth after its has finished its restructuring in 2012, chairman Wang Chuanfu told a shareholders’ meeting in the southern Chinese city of Shenzhen. He said that he expects car sales to grow 20-30% between 2013 and 2015.
“In the past we put too much focus on the number of car dealers rather than their quality,” Wang said.”We had 2,000, 3,000 dealers; it was certainly a mistake,” he said, adding that the company had been restructuring its sales team and focusing on improving the quality of its cars.
Weak auto and handset sales [BYD is also a cellphone maker – ed] knocked the company’s first-half net profit down 89% to CNY275m (US$43m). It sold a total of 220,131 vehicles in the first six months, down 23.37%.
BYD’s vehicle capacity would reach almost 900,000 this year, Wang said but he said that capital expenditure will fall to less than CNY6bn next year from around CNY9bn this year and CNY10bn last year.
The company is seeking shareholder approval to raise some CNY6bn through a corporate bond issue to cut debt and boost working capital.
Buffett invested $230m for a 9.6% stake in BYD in 2009 and in that year and last year its F3 saloon was China’s best-selling car. But lack of new models and the ending by Beijing of tax incentives for small cars has seen sales fall this year.