A full-size model of BYD's e6 electric cross-over is on display at this year's North American Auto Show in Detroit in January. It is scheduled to enter batch production and roll out this year. China Daily

HONG KONG: Mainland automobile manufacturer BYD Company raised its sales target from 200,000 units last year to 400,000 this year on signs the government will subsidize energy-saving, environment-friendly vehicles.

The battery-to-automobile manufacturer was on Warrant Buffet's radar last year. Buffet-controlled Berkshire Hathaway subsidiary MidAmerican Energy Holdings poured HK$1.8 billion for a 9.89 percent stake in BYD.

BYD Chairman Wang Chuan-fu said yesterday that the China Securities Regulatory Commission (CBRC) and the Ministry of Commerce are processing the deal at the moment, but he believed the transaction can be completed by the end of the year.

Wang said he was not worried about the deal, even after the Ministry of Commerce disallowed a bid by Coca-Cola for mainland beverage producer Huiyuan Juice Group.

"Our situation is different from the Huiyuan case," he said, noting that his company plans to sell new shares to the US partner, which won't affect the control of the existing majority shareholders.

He said that the tie with MidAmerican Energy will enable the company to increase its exposure in the US market.

Wang said automobile sales have rebounded sharply in the first quarter of this year, with aggregate sales of about 50,000 units in January and February. He set the company's sales target at 400,000 for the year, double the 200,000 sold last year.

Wang expected that the Shenzhen municipal government will fork out a subsidy of 30,000 yuan for each of the green vehicle buyer in the second half. The measure should significantly galvanize sales of the company's energy-saving vehicles.

In addition, the central government gave BYD a 359 million yuan subsidy last year and Wang believes the government will continue to finance the company because of its exploration in new energy and environmental areas.

Turnover of the company's automobile business was up by 77 percent to 8.6 billion yuan last year. Handset components and assembly services turnover gained 30 percent to 11.93 billion yuan, while rechargeable battery turnover dropped 13 percent to HK$6.2 billion.

The company targets enlarging the proportion of the automobile business from the current 32 percent to over 50 percent in the long run. The company will set aside about 5.5 billion yuan for capital expenditures this year.

BYD posted a 37 percent decrease in net profit to 1.02 billion yuan in 2008, while its turnover rose 26 percent to 26.78 billion yuan.

Meanwhile, BYD Electronic (International), the group's electronics arm, recorded a 30 percent decrease in net profit to 766 million yuan last year.

(HK Edition 03/31/2009 page16)