BEIJING, March 27 (Reuters) - Carmaker BYD Co Ltd , which is backed by U.S. investor Warren Buffett, said on Wednesday reported a 31.6 percent drop in 2018 net profit but said that it expects its first-quarter profit to jump by up to nearly 800 percent.
The car company, which is Daimler’s partner in China, said its electric car models were selling well, prompting it to predict a 583.39 to 778.65 percent growth in net profit for the first three months of 2019, from 102.4 million yuan over the same period last year.
Last year, its first-quarter profit fell sharply on cuts to subsidies for electric vehicles.
China’s market for electric cars is booming, but profits in the sector have been squeezed by fierce competition between established firms and rival start-ups, as well as moves by Beijing to cut subsidies for the market to improve product quality and standards.
For 2018, BYD recorded a full-year net profit of 2.78 billion yuan, 31.6 percent down from the previous year’s 4.07 billion yuan. Revenue was 130.05 billion yuan, versus 105.91 billion yuan in 2017.
The Shenzhen-based carmaker flagged in February that its net profit for 2018 would likely fall 31 percent on intensifying competition in the world’s biggest auto market.
The company sold 520,000 vehicles last year, up 27 percent from a year earlier. BYD, whose popular models include its Tang-series electric cars, has said it aims to sell 650,000 vehicles this year.
The company also said that it planned to issue up to 50 billion yuan worth of debt financing instruments, without specifying what it planned to do with the funds.
Overall electric car sales in China jumped 61.7 percent in 2018 to 1.3 million vehicles, according to China’s top car industry body China’s Association of Automobile Manufacturers (CAAM). It sees electric vehicle sales hitting 1.6 million this year.
China on Tuesday raised its standards for electric cars that qualify for subsidies and reduced the amount it is willing to provide to relevant companies. ($1 = 6.7237 Chinese yuan renminbi) (Reporting by Yilei Sun and Brenda Goh; Editing by Himani Sarkar and Jane Merriman)