Petrol fuels BYD comeback as sales pick up

Shenzhen-based BYD, best known for electric cars, is in the midst of a revival thanks to traditional petrol-fuelled vehicles.

Its car sales jumped 25 per cent to more than 250,000 units in the first six months of this year, outpacing China's overall vehicle market growth rate of 11 per cent. Most of those were petrol-powered, not electric.

The recovery in petrol car sales, which account for half of BYD's revenues, has raised investors' hopes that the company is again starting to live up to the promise that attracted big-name backers such as Warren Buffett.

Profits from those petrol cars, as well as from selling batteries for mobile phones and other handheld devices, can be funnelled into expensive research and development of electric cars, solar panels and other futuristic green technologies.

BYD yesterday said its first-half net profit rose to 426.9 million yuan (HK$537.8 million), well ahead of the 16.3 million yuan it earned in the same period a year earlier, helped by strong car sales and an improvement in its solar cell business.

It is too early to tell if the latest results mark the start of a sustained recovery. But BYD shares have been doing well on investor enthusiasm over the company's improving profitability and hopes that BYD could one day become China's answer to Tesla Motors, the popular California electric vehicle marker whose shares have quadrupled this year.