Byd, profit plunges 55%: Chinese internal war weighs in

Domestic competition in the Chinese market continues to make its grip felt on the accounts of Byd, which posted a drop in net profit for the fourth consecutive quarter, down 55% to 4.08 billion yuan (511.3 million euro), the lowest in three years. Net profit fell 55% to 4.08 billion yuan (EUR 511.3 million). In the same period, revenue fell 12% to 150.2 billion yuan (EUR 18.82 billion).

The results extended the Shenzhen-based company's string of profit declines to four consecutive quarters, due to intensifying competition from companies such as Xiaomi and Geely Automobile Holdings. This has prompted the industry leader to cut prices to stay ahead, with discounts reaching their highest level in two years in March, eroding the profits Byd generates from each car. According to Macquarie, 'the pressure on margins in the first quarter seems underestimated, but we expect it to ease in the coming quarters'. The quarter also delivered some positive signs. Overseas sales jumped more than 50 per cent in the first quarter, driven by soaring oil prices that stimulated demand for electric cars. Exports accounted for about 45% of Byd's deliveries in the first quarter, putting the company on track to meet its target of selling 1.5 million cars outside China this year.