Battery firm bids for leading role in auto industry

China's top battery maker and newcomer in auto sector BYD Co Ltd plans to become one of China's major car manufacturers in the next 10 years.

"The company aims to achieve an annual growth rate of above 50 per cent in terms of auto sales and to be a major player in the sector," Wang Chuanfu, chairman and president of BYD, said on the sidelines of a forum "China in 2004: New Perspective", which was organized by Sohu.com Inc.

He said that his firm's future development will be devote to the development of sedans and electric cars with an engine capacity greater than 1.6 litres, instead of mini cars.

The private firm entered the fast-growing auto sector last January when it took a majority stake in Xi'an Qinchuan Auto Co, the only State-approved car producer in the northwestern China, for 269 million yuan (US$32.41 million).

After the takeover, BYD reformed the firm's outdated management structure and increased the capital of the previously State-owned firm, Wang said.

"We are satisfied with last year's results, we have sold more than 20,000 Flyer mini family cars, and we are expecting to gain a bigger market share this year," Wang told China Daily.

The company has co-operated with several world-renowned companies such as Motorola, Delphi and Autoliv to form an international research and development team in Shanghai for the new BYD auto.

According to Wang, BYD has designed four models, of which the 1.6-litre BYD316, the first car with with the BYD brand, will make its debut in the first quarter of this year.

"As China's auto sector will continue its fast growth over at least the next five years, I'm confident my company will have a bright future," Wang said.

He added that he will bring the firm's successful experience in battery making gained in the past nine years to the new sector.

BYD, established in 1995, has made itself the world's second-largest maker of rechargeable batteries for mobile phones, closely following Japanese firm Sanyo.

The company had a 23 per cent share of the global market last year.

Battery making remains BYD's core business, accounting for more than 80 per cent of the company's total trade.

However, Wang insists the auto business, especially the research and development of clean and energy-saving electric cars, could ensure the company's future growth.

The company has made substantial progress in research into electric cars. The first 200 such cars will go on trial as taxis in Shenzhen, where the company is based, in the first quarter of this year.

"We have made a breakthrough in the quality and functions of rechargeable lithium-ion batteries for electric cars; a maximum speed of 125 kilometres per hour could be realized and every recharge could support another 400-kilometre drive," Wang said.

BYD's electric cars are expected to be launched commercially in 2006, said Wang.

The company also obtained 100 hectares in the Xi'an High-tech Industrial Park and plans to invest around 2 billion yuan (US$240 million) to set up a production plant there within five years, in order to support its future development.

Production capacity could reach 200,000 units a year when the plant is completed, becoming the largest plant producing family sedans and electric cars in western China.

However, some insiders worried whether the "battery king" could produce good electric cars and build itself into a big name in the already crowded auto market.

Source:China Daily



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