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BYD sees sales uptick in 2011

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BYD's pure-electric vehicle e6 will be put into the U.S. market in 2012. [qq.com]

BYD Co, the Chinese carmaker backed by Warren Buffett, expects sales in the world's largest car market to recover from this month after the company missed targets in 2010.

BYD may benefit as consumers traditionally buy more vehicles ahead of the lunar new year, which will start on Feb 3 this year, BYD's Chairman Wang Chuanfu said at the North American International Auto Show in Detroit. Inventory levels at the Shenzhen-based automaker are also now at "normal" levels after the company cut 100 dealers in the nation in 2010, he said.

The automaker, manufacturer of China's best-selling F3 passenger car in 2009, faces competition from overseas rivals including General Motors Co, Volkswagen AG and Honda Motor Co in the nation. BYD is under pressure as foreign makers add new, lower-priced brands on the mainland, while the government this month ended tax incentives that have helped boost sales over the last two years.

BYD missed its 2010 target by 13 percent, selling 519,806 cars. The automaker fell short of the goal even after it cut the target by 25 percent in August from an earlier estimate of 800,000 units. Volkswagen AG's Lavida, which competes with the F3, may also have overtaken the model in 2010 as the nation's best-selling vehicle, according to industry analyst JD Power & Associates.

"Our original sales target was not quite practical and the market wasn't as strong as expected," Wang said on Monday in an interview. BYD reduced dealers in China to match demand, he said.

BYD fell 1.43 percent to HK$41.25 ($5.3) in Hong Kong trading on Tuesday. The stock dropped 40 percent in 2010 after surging more than fivefold a year earlier.

Vehicle sales at the carmaker, 10 percent owned by Buffett's Berkshire Hathaway Inc, fell 15 percent to 51,300 vehicles in December, even as domestic rivals such as SAIC Motor Corp and Dongfeng Motor Group Co gained.

MidAmerican Energy Holdings Co, a unit of Berkshire Hathaway, bought 9.9 percent of BYD in September 2008.

BYD will bring its E6 pure electric cars to the United States this year, Wang said on Monday, delaying a previous plan to begin deliveries in 2010. Fleet sales of the E6 will start at the end of 2011, while retail deliveries will commence in the first quarter of 2012, he said.

The carmaker said at the 2010 Detroit show that it would bring the E6, which can run for more than 300 kilometers on a full charge, to the US last year, but had to postpone that scheduled date.

BYD has been adding new models to its range of offerings as sales of its F3 sedan slow. The carmaker introduced the S6 sport utility vehicle and M6 minivan last year to counter slowing sales of the one-liter or 1.5-liter engine F3, Paul Lin, a spokesman for the company, said last month. Sales of the F3, which is priced from 59,800 yuan ($9,027), declined 6 percent in the 11 months to November 2010 compared with the year-earlier period, according to JD Power.

Measures including consumption-tax cuts, subsidies for rural car buyers and incentives to trade in their older models helped China's industrywide vehicle sales jump 32 percent to 18.06 million in 2010, helping the nation remain the world's largest auto market for the second year.

China will raise the tax on vehicles with engines of 1.6 liters or smaller to 10 percent from 7.5 percent from this month, the Ministry of Finance said on its website on Dec 28.