Shenzhen-based BYD is raising the funds to expand after its sales fell for nine straight months through April. Industrywide sales slowed after China ended tax incentives and subsidies.
"BYD has urgent demand for capital to fuel its expansion," said Zhang Xin, a Beijing-based analyst with Guotai Junan Securities Co. "The auto industry is a capital-intensive one, and automakers need to keep investing to maintain their position amid competition.
On May 5, the automaker said it will use 1.1 billion yuan of the proceeds from the share sale for automobile research, development and production facilities in Shenzhen.
The company will spend 652 million yuan ($100 million) to expand its auto product and accessories unit and 400 million yuan on a lithium-ion battery production project, BYD said.
MidAmerican Energy Holdings Co., a unit of Buffett's Berkshire Hathaway Inc., bought 9.9 percent of BYD in 2008. The carmaker raised 1.2 billion yuan in an initial public offering in Hong Kong in 2002.
BYD car sales fell 11 percent to 40,100 in April, the company said. By contrast, China's passenger-car sales to dealers in April rose 2.8 percent from a year earlier to 1.1 million units, the China Association of Automobile Manufacturers said.
China's industry sales may fail to reach CAAM's previous prediction that the market would expand 10 percent to 15 percent, Vice Chairman Dong Yang said at a briefing last month.
HARMAN International secures audio system contracts with Geely and BYD
SHANGHAI -- Harman International Industries Inc., a major U.S. manufacturer of audio and infotainment systems, has signed two agreements to supply Zhejiang Geely Holding Group Co. and BYD Co.
Harman will produce audio systems for Geely's Emgrand EC8 sedan, BYD's e6 electric car and the EV to be developed by BYD's joint venture with Daimler AG., said Michael Mauser, co-president of Harman's automotive business.
Mauser outlined the company's activities in China late last month in an interview in Shanghai with Automotive News China.
Prior to the pacts with Geely and BYD, Harman had secured a contract to supply audio systems for SAIC Motor Co.'s Roewe-brand cars.
In China, Harman also makes audio systems for BMW AG, Audi AG and Mercedes-Benz, said David Karch, chief of Harman's Asia automotive business.
Harman's factory in the east China city of Suzhou also exports audio components to Hyundai Motor Co., Kia Motors Corp., Ssangyong Motor Co. and Chrysler Group LLC.
"But our main priority is to supply the Chinese market," added Mauser.
Harman is building a new $100 million (649 million yuan) factory in the northeast China city of Dandong to primarily supply China's fast-growing market.
The plant, Harman's second Chinese factory, will launch production later this year. Harman has 1,200 employees in China. The company will have 1,500 employees in China by 2015, said Karch.\
Source: Auto News China
Visit us at: www.wallyedgar.com
Toll Free at: 1-866-
On Twitter @WallyEdgarChevy & @TweetMyChevys
# # #
About us: Celebrating our 25TH year. We serve multiple Counties in and around the Detroit Automotive Communities.
Located 3 miles north of THE PALACE of Auburn Hills in Lake Orion Michigan.We are ONE mile east of the GM ORION ASSEMBLY.1-866-