Chinese automaker BYD Co. has recorded a dramatic fall in year-on-year profits, resulting in job losses
The BYD F3 Image: BYD Co |
Chinese automaker BYD Co. saw year-on-year profits fall 89% to 275 million yuan ($43 million) in the first half of the year, due to lower vehicle sales, tougher competition and higher production costs.
The company, which is backed by American billionaire investor Warren Buffet, sold 220,131 vehicles in the first six months of 2011, down 23.4%, and experienced a sharp 27% decline in auto sales revenue to 9.5 million yuan.
Sales of BYD's mainstream models, such as the F3 compact car, F0 microcar and the F6 mid-sized sedan were heavily affected by the termination of beneficial government tax incentives. Alternative-energy vehicle sales faired poorly, with the E-6 model selling only six models in the first half. However, BYD did report strong sales on newer models, such as the L3 and G3 sedans as well as the S6 SUV.
Poor sales figures have lead BYD to cut 1,800 jobs in their sales unit, according to media reports. The Chinese automaker will begin by reducing the number of salespeople by 1,000, then may cut jobs in other areas. BYD CFO Wu Jingsheng has not apparently commented publicly on the situation.