BYD, Daimler boost clean-vehicle partnership
Updated: 2013-03-04 11:22
BYD Co, the Chinese car and battery maker in which famed investor Warren Buffett has a 10 percent stake, and Germany's Daimler AG have expanded their joint venture in electric automobiles by nearly half.
BYD, listed in Hong Kong and Shenzhen, announced on Friday that it and Daimler will each invest 430 million yuan ($69 million) in BYD Daimler New Energy Technology Co, a 50-50 partnership the companies set up in 2011.
With the combined investment of 860 million yuan, the joint venture's registered capital will total 2.36 billion yuan.
BYD said in a statement that the increased capital will allow the JV to develop clean-energy vehicles "aggressively" and bring competitive products market "as early as possible".
The announced capital injection shows that BYD is continuing to bet on clean-energy vehicles for the future.
On Thursday, the company said in a preliminary earnings report that revenue in 2012 fell by 4 percent to 46.7 billion yuan, with operating losses of 320 million yuan. That contrasts with an operating profit in 2011 of 1.4 billion yuan. BYD has been hit by a slowdown in sales of cars as well as in the mobile-phone handsets and components it also manufactures. Its solar-cell business has also shrunk.
BYD intends to sell about 6,000 electric cars and 2,000 electric buses this year, up from the 1,700 and 700, respectively, that is sold in 2012, according to the Wall Street Journal.
In China, carmakers sold 12,791 electric cars last year, doubling the 2011 performance. Sales of all types of cars in China totaled 19.3 million in 2012.
Wang Chuanfu, chairman and CEO of BYD, said in January that his company will adopt different business models in different regions.
"We are not only selling cars; we want to export business models to overseas markets, including business plants with partners or by ourselves," Wang told Shenzhen-based Securities News.
Stella Li, senior vice-president of BYD, said the company is considering an electric-bus factory in California and will decide on the location in the first quarter. The factory is expected to produce 50 to 100 buses next year and 500 in 2015.
She said BYD, which started as a maker of mobile-phone batteries, has a unique position in the market because it is a leader in both car and battery technologies.
From late November to early January, BYD conducted demonstrations of its buses in Los Angeles, including a trial run on rental-car company Hertz's shuttle service at Los Angeles International Airport.
In December, BYD established a joint venture in Bulgaria to make K9 buses for sale in Europe.