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