China BYD lines up EU channel for hybrid car

China's BYD Co has signed up 10 distributors for its plug-in hybrid car in Europe ahead of its targeted entry into that market in 2010, a senior company executive said on Tuesday.

BYD Auto, a subsidiary of the Hong Kong-listed rechargeable battery maker, has used its expertise in batteries to develop rechargeable electric vehicles that it hopes will eventually compete with General Motors and Toyota Motor.

The firm, which soon plans to begin selling its first electric hybrid car in China, also wants to ship it to Europe, where potential fleet buyers including Deutsche Post AG's delivery arm DHL Express have indicated initial interest, said Henry Li, general manager of BYD Auto's export trade division.

"We'll start selling in Europe before we get into the United States," Li told Reuters in a telephone interview.

He added that the company had started working with regulators in Europe and in the United States -- where it has yet to secure local distributors -- to pass stringent safety and emissions standards mandated for new entrants.

"We will start with our hybrid models if everything goes well. Electric cars will be the step after that, as they need a well laid-out charging network," he said.

BATTERY TECHNOLOGY

BYD is scheduled to launch its first all-electric car, the E6, in China in the second half of 2009, he added.

Many of the world's big carmakers, including GM, Toyota, Daimler AG and Ford Motor, are racing to develop electric and hybrid vehicles that would help to ease global environmental problems such as carbon dioxide emissions.

GM aims to have its all-electric Chevy Volt ready for launch in 2010, while Honda Motor will roll out an all-new hybrid car in North America in April 2009 to challenge Toyota's market-leading Prius.

Li said BYD aimed to leverage its battery technology and offer generous warranties to make its E6 competitive in Europe and North America. "Initial orders would most likely come from fleet customers. DHL and some electric power producers have expressed an interest in BYD's hybrid to our European distributors," he said.

BYD Auto, however, has no plans currently to cooperate with global rivals in developing clean-energy vehicles, he said.

Li also said BYD's shares still had more room to rise despite a 57 percent gain since mid-September, when MidAmerican Energy Holdings Co, a unit of U.S. billionaire investor Warren Buffett's Berkshire Hathaway Inc , said it would pay $230 million for a 10 percent BYD stake.

Since the start of the year BYD is down only 2.8 percent, compared with a 55 percent decline for Hong Kong's benchmark Hang Seng Index

"BYD is not just a manufacturer. It is also a technology firm," he said. "Our shares were very, very low before Buffett's investment. They've gone up a lot lately but still have growth potential."