BYD Co. reported its weakest revenue growth in more than a year in a potential sign of the damage discounting has done in China, the world’s biggest auto market.
(Bloomberg) — BYD Co. reported its weakest revenue growth in more than a year in a potential sign of the damage discounting has done in China, the world’s biggest auto market.
Revenue rose just 67% to around 140 billion yuan ($17.8 billion) in the three months ended June, according to Bloomberg calculations based on first-half earnings published Monday. Still, net income more than doubled after the company sold a record number of plug-in hybrid and fully electric vehicles.
Fueled by rebounding sales in China, BYD last month reported preliminary first-half net income of 10.5 billion yuan to 11.7 billion yuan.
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China’s auto market has been embroiled in a fierce price war this year. BYD’s still-robust financial performance will help it as it navigates another period of market discounting with a preferred strategy of cutting prices on new models releases. On the weekend, BYD unveiled a slightly cheaper range of 2023 Tang vehicles at the Chengdu Auto Show.
The continued strong sales volume performance in recent months has enabled BYD to maintain its lead over Volkswagen AG as China’s best-selling car brand this year, having leapfrogged the German auto giant in the first quarter.
Known for selling affordable cars to the masses, BYD has also been making drives in bolstering its appeal to a wider range of consumers.
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The EV maker has unveiled two luxury brands, Yangwang and Fang Cheng Bao, enabling it to sell EVs in the 1 million yuan price category, more than double the cost of some of its existing higher-end vehicles. The company has also pushed two cheaper models, called the Seagull and Dolphin, to undercut its peers as well.
While BYD has a seemingly unassailable lead at the top of the market, weaker foreign rivals and smaller Chinese EV players are making moves to bolster their capabilities, especially in the so-called smart EV, autonomous driving space.
Xpeng Inc. snapped up Didi Global Inc.’s smart car business Monday in a $744 million deal. Xpeng’s appeal in the intelligent vehicle space has also won it a $700 million investment from Volkswagen AG in July, itself seeking to turn around its fortunes in the rapidly changing China auto market.
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