BYD has reported an 89% decline in profits and 11% fall in revenue year-on-year in the first half of 2011.
The company said in a statement on the Shenzhen stock exchange that its net profit for the first six months of the year came to CNY275.4m, down 89% on the same period a year ago. First-half revenue was reported as CNY22.5bn, a 10.8% drop on last year.
BYD’s car sales by volume were down 23% in the first half of the year, at 220,131 units.
Analysts say that the dip to BYD’s performance was expected due to increased competition and slower demand at the low-end of the Chinese market where BYD sells most of its models.
BYD Chairman Wang Chuanfu said in a written statement that he expects growth in Chinese car sales will remain slow in the second half, citing weak consumer confidence and rising inflation rates in China and continuing economic uncertainty in Western markets.
BYD also warned that its net profit for the first three quarters may fall between 85% to 95% due to fierce competition in China’s car market. Nevertheless, BYD Chairman Wang Chuanfu told reporters that he was confident that BYD auto sales in the second-half of the year would be higher than the first-half, adding that the company had no plan to cut selling prices. BYD has just launched its new SUV, the S6, and the G3 model will replace the popular F3, helping to stimulate sales in the second half.
BYD sold 112,842 units of the F3 in China during the first half of calendar 2011, making it the country’s best selling home-brand car (excluding the big selling micro-minivans such as the Wuling Sunshine).