BYD February Vehicle Sales Plunge 41% on Waning Domestic Demand

(Bloomberg) — BYD Co. reported a 41% year-over-year decline in vehicle sales in February after the record-long Lunar New Year holiday brought manufacturing and retail operations in China to a near halt for much of the month.

The world’s largest electric car maker sold 190,190 vehicles last month, including both plug-in hybrid and pure battery models, it said on Sunday. This includes 187,782 passenger vehicles, representing the bulk of the Chinese company’s volume. February sales fell 9.5% compared to the previous month. New energy vehicle exports reached 100,600 units.

In the first two months of the year, sales fell 36% to 400,241 units; BYD’s domestic performance has declined due to the recent decrease in incentive policies and intensification of competition. Since Lunar New Year holiday timing changes annually, creating significant fluctuations in monthly production and demand, combining January and February allows for a clearer comparison with the previous year.

A reduction in purchase tax exemptions and declining consumer confidence are putting pressure on demand, with buyers awaiting the launch of new models and greater clarity on government trade-in initiatives before committing to a purchase.

Shenzhen-based BYD’s focus remains on balancing inventory levels at dealers while maintaining the aggressive pricing that has helped it maintain market share over the past year.

Apart from weakness at home, BYD’s international expansion helped it sustain volume growth. Key markets in Latin America and Europe are now at the core of the company’s strategy.

Investors are prepared to look to BYD’s performance in March, a traditionally high-volume month, for signs of recovery as demand typically picks up after the holidays. With the Beijing Auto Show approaching at the end of April, BYD is under pressure to introduce new models to stimulate domestic sales.

–With help from Felix Tam.

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