By Michael Elkins
Wang Chuanfu, Chairman of Chinese electric automaker BYD (SZ:002594) (OTC:BYDDY), told reporters in Hong Kong Wednesday that the company is large enough to shake off the impact of a bruising price war and faltering demand in China, after reporting an 11-fold increase in fourth-quarter profit.
The strong result came as BYD extended its lead in the Chinese market, thanks to an expanding range of products that is helping it overtake Volkswagen (ETR:VOWG_p) to become the top-selling brand.
The company posted on Tuesday a quarterly profit for October-December of CNY 7.3 billion ($1.06 billion), up from CNY 602M a year earlier.
The gross profit margin for automobiles and related products, which accounted for 77% of BYD's revenue in 2022, increased to 20.4%, well above the 3.7% margin in 2021.
BYD accounted for 41% of new energy car sales in China for the first two months of the year. Tesla (NASDAQ:TSLA), by contrast, had an 8% share.
Wang said he expected the company's vehicle sales to grow more than 80% in the first quarter, which would outperform the overall market but mark a slower pace compared to BYD's more than 200% sales increase in 2022.