BYD's expected costs in 2012 to be under 5b yuan, president says

Gasgoo.com (Shanghai March 27) - BYD's cost expenditure for this year is expected to be halved to under five billion yuan ($792.59m), the Guangzhou Daily reported today, quoting a statement made by manufacturer Chairman and President Wang Chuanfu. Mr. Wang made the statement yesterday at the manufacturer's annual performance summit in Hong Kong. BYD's costs last year totaled around 10 billion yuan ($1.59b).

Mr. Wang (pictured) was quick to refute media concerns about further employee cuts, responding that BYD had no such plans, and is actually looking to start new large-scale recruitment drives.

Last week reports surfaced that about 20 percent of workers at the BYD Baolong Plant in Shenzhen, Guangdong, would be transferred to the manufacturer's factory in Huizhou, Guangdong, due to decreasing orders at the former site. Several in the media allege that the move is merely BYD's way of letting employees go. Wang Chuanfu denied such allegations as "false reporting", saying that it was a normal staff transfer.

When asked about the manufacturer's fall in gross profits over the years, Mr. Wang cites decreasing growth in China's automobile market, as well as relative immaturity in the market for new energy vehicles. Mr. Wang believes BYD's gross profit will gradually recover following the resolution of these issues.

BYD's financial results have also caught the media's eye. According to BYD's annual performance report, the manufacturer's net profit fell 49.04 percent last year. According to the Administrative Measures for the Sponsorship Business of the Issuance and Listing of Securities, the China Securities Regulatory Commission has the power to revoke the certification of a stock market sponsor if an enterprise it sponsored sees its annual net profit drop over 50 percent. BYD was dangerously close to breaking the 50 percent barrier, placing IPO sponsor UBS Securities in great danger.