Buffett's China visit could bode well for BYD

Warren Buffett (2nd L) and BYD's President Wang Chuanfu (1st R) symbolically pass a key model to the owner of the millionth vehicle made by BYD, in Shenzhen, south China's Guangdong Province, Sept. 27, 2010. Billionaire investor Warren Buffet began a three-and-half-day visit to China on Monday, in which he will take part in a series of marketing events of BYD, the fast growing Chinese electric car producer he has invested in, and visit BYD's new energy research center, Xinhua learnt from a schedule obtained from Shenzhen-based BYD. Photo: Xinhua

His China trip will end in Changsha, capital of central China's Hunan Province, where he plans to visit BYD's electric bus production base.

Wang Jianjun, a sales manager of BYD, said Buffett's China visit shows the tycoon's confidence in BYD.

China is the world's largest auto market, and it is grappling with oil shortages and air pollution. The Chinese government attaches importance to developing non-fossil-fuel-powered vehicles, as evidenced by a raft of preferential government policies for electric car makers.

BYD, the battery-turned-auto maker, not only pioneered China's electric car industry, but does research and development on solar energy. The company's development strategy matches Buffett's investment tastes.

Established in 1995, BYD sold more than 400,000 units of vehicles in 2009, sustaining a 100-percent growth rate for the fifth straight year.

It reported a more-than-50-percent rise in sales revenue and profits in the first half of this year.

On August 3, BYD said it would lower this year's annual sales target 25 percent, to 600,000 units.

Du Guozhong, head of the company's media relations department, said the lowering in its sales target was because the company's expansion plans in Shaanxi Province had become embroiled in dispute with a local government.

BYD's stock price has risen more than 20 percent on the Hong Kong Stock Exchanges over the past week, boosted by the news of Buffett's China visit. It added 4.4 percent Monday to close at 57.6 HK dollars ($7.4).