Profits Collapsing at Buffett-Backed Chinese Automaker (BRK-A, BRK-B, F, GM, TM, HMC)

Chinese auto and battery maker BYD Co. Ltd reported today that third-quarter profits fell 94% year-over-year as China's domestic car market continues its slump. MidAmerican Energy Holdings Co., a division of Warren Buffett's Berkshire Hathaway Inc. (NYSE: BRK-A) (NYSE: BRK-B), acquired 10% of BYD in 2008 for $230 million.

BYD had big plans for the Chinese market, with attractively priced small cars and even an all-electric vehicle. But since the government eliminated subsidies for new car buyers in mid-2010, BYD and other Chinese car makers have suffered.

U.S. carmakers Ford Motor Co. (NYSE: F) and General Motors Co. (NYSE: GM) reported that year-over-year sales grew 35% and 1.7%, respectively, in September. But GM's monthly sales are nearly double Ford's. Japanese carmakers Toyota Motor Corp. (NYSE: TM) and Honda Motor Co. Ltd. (NYSE: HMC) sales fell 40% and 41%, respectively, in September.

Honda announced this morning that it is cutting full-year sales and profit forecasts by 20% due to weak sales in China brought on by the current dispute between China and Japan over some small islands.

Paul Ausick


Filed under: 24/7 Wall St. Wire, Autos, Buffett, Buffett Holdings, China, Earnings Tagged: BRK-A, BRK-B, F, GM, HMC, TM
Read Full Story

Markets

DJIA 25,250.55 -89.44 -0.35%
NASDAQ 7,430.74 -66.15 -0.88%
NIKKEI 225 22,549.24 277.94 1.25%
HANG SENG 25,462.26 17.20 0.07%
DAX 11,657.42 43.26 0.37%
USD (per EUR) 1.16 0.00 -0.04%
USD (per CHF) 0.99 0.00 0.10%
JPY (per USD) 112.01 0.17 0.16%
GBP (per USD) 1.32 0.01 0.49%