BEIJING, March 28 (Reuters) - Chinese automaker BYD Co Ltd,
backed by Warren Buffett's Berkshire Hathaway Inc,
forecast a 24-35 percent year-on-year fall in net profit for the
first quarter, as the government reins in subsidy support for
green energy cars.
The Shenzhen-based manufacturer , which
has invested heavily in making battery electric and plug-in
hybrid vehicles, estimated net profit for Q1 2017 at between 550
million yuan ($80 million) and 650 billion yuan.
BYD reported annual net profit rose 78.9 percent to 5.1
billion in 2016, roughly in-line with preliminary figures issued
China's central government aggressively promotes green
energy vehicles, including spending billions of dollars in
subsidies, to combat urban pollution and encourage technology
But the country imposed stricter requirements on electric
carmakers after a subsidy cheating scandal last year. It also
cut subsidies 20 percent this year to promote competition.
"Changes to new energy vehicle (NEV) subsidy policy will
affect the first quarter, the NEV industry will have a
short-term adjustment," the automaker said in its Shenzhen
"The group's NEV business will come under a certain
pressure, and NEV sales and profits are expected to decline."
BYD reported slower earnings in the third quarter last year
after four consecutive quarters of triple-digit growth as NEV
Earnings growth is expected to decline further in 2017 with
analysts polled by Reuters predicting an 8 percent rise in net
profit for the year.
Sales of electric and plug-in hybrid cars fell 30.5 percent
in the first two months of 2017 as consumers wait for local
governments to announce their new subsidy policies for the year,
which supplement those given by central authorities.
($1 = 6.8840 Chinese yuan renminbi)
(Reporting by Jake Spring; Editing by Randy Fabi and Mark