BYD wins contract to build Brazil monorail, landing Buffett-backed firm its biggest overseas deal

BYD won its biggest overseas order for monorail systems in an affirmation of efforts by the Chinese electric-vehicle maker to revive profit growth.

The company signed a 2.5 billion Brazilian real (US$689 million) order this week to build a light transit system in Salvador, Brazil, Stella Li, a senior vice-president at BYD, said in a telephone interview Thursday. The Shenzhen-based firm is also in discussions for as many as eight monorail deals in the Americas, including the US, and expects to nail at least two this year, Li said.

“This is a milestone deal for us,” Li said from Los Angeles. “We have been investing outside China for a few years and are about to enter the harvesting stage, with the overseas business starting to make profit and even leading the company’s growth.”

The company posted profit declines in five of the past 10 years as rising competition in China’s electric-vehicle market eroded BYD’s market lead. BYD -- about a quarter owned by Warren Buffett’s Berkshire Hathaway Inc. -- made its foray into the monorail business two years ago as it sought new earnings generators and has also tried to cut its reliance on the domestic market.

BYD’s overseas business is expected to break even this year and may start contributing to profit in 2019, said Li, who is in charge of the company’s long-term strategic planning.

Construction on the monorail in Salvador is expected to begin in the fourth quarter and be completed in 2020. Li said the transit system will be operational in 2021.