BYD's Qin, e6 and Joint-Venture (with Daimler) Denza EV
An interesting article on BYD's economical situation come to us from South China Morning Post.
In recent years, BYD (and Geely) lost the most share in the Chinese automotive market among manufacturers, as their conventional car sales decreased, and the small New Energy Vehicles (all-electric and plug-in hybrids) sector in which BYD bet big didn't compensated from this drop. At least not yet.
Perspectives are moderate because car sales in China decelerated to some 7% from previous double-digit growth numbers, so competition is even more fierce now.
BYD seems to need cash and finally, after a year of waiting, got permission to set up a finance joint venture to leverage car sales.
At the same time, BYD is selling its profitable electronics division - BYD Electronic Components (for up to $370 million):
"Struggling electric car maker BYD (1211.HK; Shenzhen: 002594) is starting to look a bit desperate, announcing a major asset sale just days after it received approval for a stalled finance joint venture aimed at boosting its sputtering sales. The approval this week for its auto finance joint venture comes as rival Geely (0175.HK) also has just announced its own approval for a similar stalled joint venture with France's BNP Paribas (Paris: BNP). That indicates Beijing may be starting to worry about a broader slowdown in China's car market after several years of breakneck growth.
Earlier this week BYD announced it had finally won approval from the banking regulator to set up a vehicle financing joint venture that it previously announced nearly a year ago. That initiative should help both its traditional and especially its new energy car sales, since EVs are typically quite a bit more expensive than traditional cars and also face a wide degree of skepticism from mainstream consumers that BYD is targeting for the market.
Now BYD, which is backed by billionaire investor Warren Buffett, has just announced it is selling off one of its older electronic component businesses, in what looks like a bid to raise cash to shore up its shaky financial position. Under the deal, BYD will sell its BYD Electronic Components unit to Holitech (Shenzhen: 002217) for up to 2.3 billion yuan. In exchange, BYD will get cash and up to 12.3 per cent of Holitech, a dubious looking chemical company traded on the Shenzhen stock exchange."
Interesting? Yes, but what's it all mean for BYD's electric car future? We're not quite sure yet.
Whatever the situation is, BYD now have time to increase NEVs sales and back on path of growth.
Source: South China Morning Post