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AUTOSHOW-INTERVIEW-UPDATE 1-BYD sees April car sales back to uptrend

Published 04/19/2011, 04:59 AM
Updated 04/19/2011, 05:04 AM
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* Eyes yuan bond, A-share listing to ease debt burden

* To deliver 200 electric buses to Shenzhen in 2011

* To export electric buses to U.S., Europe end-2011, 2012 (Adds details)

By Alison Leung

SHANGHAI, April 19 (Reuters) - BYD Co Ltd , a Chinese car and battery maker backed by billionaire Warren Buffett, expects car sales volume to return to an uptrend in April and plans to export electric buses by end of 2011 or in 2012, its spokesman said on Tuesday.

Buffett's Berkshire Hathaway Inc , holds a 10 percent stake in BYD, which has lost more than half of its market value since the second half of 2010 as its sales strategy backfired and competition at home intensified.

"April is traditionally a good month and our sales have started to increase in March from February," Paul Lin, the marketing manager and spokesman for BYD Auto Overseas, told Reuters in an interview at the Shanghai auto show.

He expects BYD's auto sales to return to a growth trend in April from a year earlier as its dealership problem has been sorted out.

BYD aims to sell 10 to 15 percent more cars this year from 520,000 units in 2010. This compares with BYD's estimate of a 10 percent rise in volume sales in the China market.

Car sales growth in China, the world's largest auto market, eased to 9 percent in the first quarter due to the expiry of government tax incentives and measures to tackle traffic congestion in Beijing. BYD posted a worse-than-expected 27.5 percent drop in the same period, underperforming the industry.

BYD has shifted its focus to more profitable products, such as the 6 series, which are full-sized vehicles, and electric buses.

The automaker officially launched its S6 sport utility vehicle at the auto show on Tuesday.

"The joint venture companies in China are moving down and we are moving up,"Lin said, adding BYD's 6 series vehicles were priced between 100,000 yuan ($15,317) and 200,000 yuan each.

Global auto makers, such as General Motors , and their Chinese partners are rolling out dedicated local brands and targeting buyers in smaller towns and cities.

GREEN BUS

BYD Chairman Wang Chuanfu has said the company expected to enter the mass U.S. auto market in the first quarter of 2012, starting with its e6 electric car model, followed by the S6DM, and eventually electric buses.

"Our ebuses are now testing in the United States and Europe," Lin said. These tests would take about 6 months to complete and exports will follow, Lin said.

BYD will deliver the first batch of 200 electric buses to Shenzhen and it also has firm orders for 500 electric buses from Changsha. "We don't really have any competitors in China on ebuses," he added.

The company is considering expanding its electric bus production capacity in its Changsha plant, which currently can make 1,000 units a year. The buses are selling at around 3 million yuan each.

FUNDING NEEDS

BYD said in its annual results last month that its total borrowings quadrupled to 14 billion yuan by the end of 2010, of which 11.36 billion yuan were repayable within one year.

The company is looking at a yuan bond issue and an A-share listing to help ease the debt burden.

"We will issue a yuan bond in Hong Kong next week," Lin said, but did not give details.

Its subsidiary BYD (HK) was expected to issue a 3-year bond with an expected annual interest of around 4 percent and a potential size of $500 million, IFR reported last week.

UBS is sole bookrunner and joint leads with CCB International Capital on the deal.

BYD has applied to Chinese regulators to issue 100 million A shares on the Shenzhen stock exchange. "We hope the listing can be done this year," Lin said.

Shares of BYD ended down 1.6 percent against a 1.3 percent fall on the main index and beating local rival Geely Automobile Holdings Ltd , which dropped nearly 4 percent. ($1 = 6.529 Chinese yuan) (Reporting by Alison Leung; Editing by Jacqueline Wong)

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