BYD reduces employee wages in order to cut costs

Gasgoo.com (Shanghai June 28) - In order to cope with declining financial performances, Shenzhen-based BYD has enacted a series of different policies. Following its staff cuts last year, the company has recently thought up a new scheme: decreasing salaries for its management and staff. A China Business News report today revealed that the company will cut wages throughout all its departments. Bonuses from June to September will also be reduced from 33 percent to 15 percent.

When asked about the decision, a BYD official maintained that decreasing salaries will not affect the company's performance. The official also commented that it remains to be seen how long the policy will last. "The company has no choice," the official said, adding that BYD's solar energy and automobile operations have all been performing poorly.

An unnamed BYD dealer complained that sales of the S6 (pictured) are failing to meet expectations. "[BYD] previously announced that prices of the S6 would remain the same for the next two years, however we have already used up all of the subsidies supplied to us," the dealer stated. According to the latest statistics from the China Association of Automobile Manufacturers, monthly sales of the S6 fell to under 5,800 units in April. S6 sales the following month totaled only 6,500 units, far from the 10,000 monthly sales the company was attaining in 2011.

BYD's net profit last year was reported to total only 629 million yuan ($99.38m), falling nearly 70 percent from 2010. Furthermore, BYD's solar power, mobile phone and battery businesses have also been performing weekly. Its solar power battery business in particular has been reporting deficits.

BYD's net profit for the first quarter of this year was 27 million yuan ($4.28m). Despite the over 30 percent recovery in its stock price in April, Yuanta Securities still recommends owners to sell.