After posting an 11-fold gain in fourth-quarter earnings, Chinese electric vehicle (EV) manufacturer BYD claimed on Wednesday that it was big enough to weather the effects of a brutal price war and waning Chinese demand.
A growing product lineup that is assisting it in surpassing Volkswagen (VOWG p.DE) to become the best-selling brand contributed to the good performance, which came as it increased its market share in China.
Chairman Wang Chuanfu told reporters in Hong Kong on Wednesday that BYD's size will allow it maintain excellent profit margins despite a price war and the elimination of EV subsidies. He was referring to events that happened after the conclusion of the fourth quarter.
In comparison to the same period a year prior, the company's quarterly earnings increased to 7.3 billion yuan ($1.06 billion) on Tuesday.
The gross profit margin for cars and related items, which made up 77% of BYD's revenue in 2022, rose to 20.4%, a significant improvement from the 3.7% margin in the previous year.
After Tesla's decision to lower prices on January 6 in order to protect market shares amid waning demand, more than 40 vehicle makers, including BYD, did the same.
Nevertheless BYD is one of the few companies gaining market share. With the help of its plug-in hybrid and all-electric Dynasty and Ocean models, BYD overtook VW in February for the second time in four months.
For the first two months of the year, the largest auto market in the world saw 41% of sales of so-called new energy vehicles go to BYD. Tesla had a share of 8%, in contrast.
Wang predicted that the company's car sales will expand by more than 80% in the first quarter, outperforming the market overall but growing at a slower rate than BYD, whose sales are estimated to increase by more than 200% in 2022.
Since the beginning of the year, when Beijing terminated a national subsidy program for EVs and plug-in electric vehicles, the Chinese EV giant's output has been decreasing.
According to a report last week by Reuters, it has shortened shifts at two auto assembly plants in China's Shenzhen and Xian that build its best-selling models, such as the Song and Qin EVs.
(Source:www.usnews.com)
A growing product lineup that is assisting it in surpassing Volkswagen (VOWG p.DE) to become the best-selling brand contributed to the good performance, which came as it increased its market share in China.
Chairman Wang Chuanfu told reporters in Hong Kong on Wednesday that BYD's size will allow it maintain excellent profit margins despite a price war and the elimination of EV subsidies. He was referring to events that happened after the conclusion of the fourth quarter.
In comparison to the same period a year prior, the company's quarterly earnings increased to 7.3 billion yuan ($1.06 billion) on Tuesday.
The gross profit margin for cars and related items, which made up 77% of BYD's revenue in 2022, rose to 20.4%, a significant improvement from the 3.7% margin in the previous year.
After Tesla's decision to lower prices on January 6 in order to protect market shares amid waning demand, more than 40 vehicle makers, including BYD, did the same.
Nevertheless BYD is one of the few companies gaining market share. With the help of its plug-in hybrid and all-electric Dynasty and Ocean models, BYD overtook VW in February for the second time in four months.
For the first two months of the year, the largest auto market in the world saw 41% of sales of so-called new energy vehicles go to BYD. Tesla had a share of 8%, in contrast.
Wang predicted that the company's car sales will expand by more than 80% in the first quarter, outperforming the market overall but growing at a slower rate than BYD, whose sales are estimated to increase by more than 200% in 2022.
Since the beginning of the year, when Beijing terminated a national subsidy program for EVs and plug-in electric vehicles, the Chinese EV giant's output has been decreasing.
According to a report last week by Reuters, it has shortened shifts at two auto assembly plants in China's Shenzhen and Xian that build its best-selling models, such as the Song and Qin EVs.
(Source:www.usnews.com)