Feb. 29 (Bloomberg) -- BYD Co., the Chinese carmaker partly owned by Warren Buffett’s Berkshire Hathaway Inc., reported a 44 percent drop in net income because of “fierce” competition and slowing sales of solar-energy products.
Profit declined to 1.4 billion yuan ($222 million) in 2011 from 2.52 billion yuan in 2010, the Shenzhen-based company said in a preliminary earnings statement to the city’s exchange yesterday. That compares with an average estimate of 968 million yuan of 15 analysts surveyed by Bloomberg. Sales rose 1.2 percent to 49 billion yuan.
“Fierce competition and structural changes in products,” as well as lower prices for solar-energy products, contributed to reduced profitability, according to the statement. The company said on Oct. 28 that full-year profit might decline as much as 65 percent.
Demand for BYD’s cars slowed after the government ended buying incentives and the popularity of its top-selling F3 sedan waned. The automaker’s third-quarter vehicle sales fell 3.3 percent from a year earlier to 93,960 units, according to China Association of Automobile Manufacturers data.
BYD, formed 16 years ago as a battery maker, began developing electric cars in 2003 when it expanded into automaking. It began selling its E6 electric car to individuals in October, after testing it as a taxi in Shenzhen.
BYD has risen 48 percent this year in Hong Kong trading, compared with a 17 percent gain for the benchmark Hang Seng Index. The stock fell 2 percent to HK$24.90 in Hong Kong yesterday, before the announcement.
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