SHANGHAI, Oct 29 (Reuters) - Chinese automaker BYD Co Ltd , backed by Warren Buffett’s Berkshire Hathaway Inc, said on Sunday that its annual profit would likely fall by as much as a fifth amid rising competition in the hybrid and electric car markets.
China has set strict targets for carmakers to shift to so-called new-energy vehicles (NEVs), triggering a rush of companies looking to tap into potential demand for less-polluting cars in the world’s biggest auto market.
BYD, which has invested heavily in hybrid and electric vehicles, forecast full-year net profit would fall by between 15.1 percent to 20 percent to a range of 4.04 billion yuan ($607.54 million) to 4.29 billion yuan, it said in filings on the Hong Kong and Shenzhen stock exchanges.
Net profit in 2016 rose 80 percent to 5 billion yuan.
China has signalled a long-term aim to shift towards new-energy vehicles, but has also been phasing out subsidies for the market, raising concerns from some automakers that consumer demand alone will not be enough to drive sales.
China’s overall car market has also slowed this year after a tax break for smaller cars was cut back.
BYD said January-September net profit fell 23.8 percent to 2.79 billion yuan. In August it had forecast a drop of roughly 20 percent to 25 percent. Third-quarter net profit fell 23.9 percent from a year earlier to 1.07 billion yuan.
Sales of new-energy vehicles in the wider China market in January-September totalled 398,000, up 37.7 percent from 2016, industry data showed. The country is on track to meet a sales target of 700,000 NEVs this year.
$1 = 6.6498 Chinese yuan renminbi Reporting by Adam Jourdan in SHANGHAI and Zhang Min in BEIJING; editing by Jason Neely