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The Chinese manufacturer of phone components, automobiles and batteries – BYD – of which Berkshire Hathaway owns 10%, mentioned last week that the company profit has quadrupled to $18.1 million, or 112.4 million yuan. This happened within the first three months of 2013. Sales have begun to recover after last year’s major decline.

The company’s revenue rose to 12.9 billion yuan during the first quarter. Just one year ago, the Shenzhen and Hong Kong listed company’s revenue was only at 11.7 billion yuan. During the first-quarter of 2012, the company’s net profit was only 27 million yuan.

Throughout last year, BYD’s profits plunged and dropped about 94% due to slow growth in the auto industry. The company also saw bad publicity when one of its cars caught on fire amidst a collision.

Last month, the company predicted that the first-quarter profits of 2013 would rise by about 418% from the previous year.

Wang Chuan-fu, the company’s chairman, sat upon the Forbes China Rich list as the richest man in 2009. At the time, he was worth $5.8 billion. On the Forbes 2013 billionaires list, Wang ranked number 641. He’s currently worth $2.3 billion.

In 2008, Warren Buffett and Berkshire Hathaway bought close to a 10% stake in BYD.

BYD, electric car producer in China, that is also backed partially by Warren Buffett and Berkshire Hathaway, tells us that the 2012 year on year profit has dropped by more than 94%. This happened because of slow growth in the Republic of China.

This company is currently based out of Shenzhen, a southern boomtown, and they tell us that their net profit from 2012 was 81.3 8 million yuan (which is equivalent to $12.92 million), and this is down from 1.3 8 billion yuan in the year 2012.

One of the Berkshire Hathaway subsidiaries currently owns 9.56% of the company BYD.

“Under the impact of slower economic growth, the automobile industry in the PRC (People’s Republic of China) remains weak,” we learned in the statement.

At the time of this writing, China is currently the biggest automaker in the world and their automobile sales in total rose 4.3% year-over-year in 2012 to 19.31 million automobiles.

Due to domestic economic growth slowing, and limits on car numbers by a few of the cities as well as a political rift between Japan and China which unfortunately put a hurting on sales of these Japanese brand cars and weighed heavily on the market last year.

The overall Chinese economy expanded by 7.8% in the year 2012. That is currently the slowest pace that it’s seen in the last 13 years. This is due to weakness in some of the key overseas markets, as well as further weakness at home.

BYD, a car company that makes hybrid cars, electric cars and conventional cars, only sold a total of 420,000 vehicles in 2012. This is a “slight decrease” from the year 2011, but no comparative figures were given.

“The solar energy business was under great pressure due to the sluggish photovoltaic industry, resulting in considerable adverse effect on the overall results of the group,” added BYD.

The company also produces solar products such as solar panels and solar cells, rechargeable batteries and even telephone handsets.

The solar industry on a global scale has been cut down a notch by the economic slowdown in the United States and Europe, plus there is weak pricing to be blamed on Chinese companies because they’re looking to gain market share by undercutting competitors prices.

Suntech, a Chinese company, once the biggest producer of solar panels, says its main subsidiary is currently facing bankruptcy

On Monday, BYD close-up by 0.47% to 23.51 UN in Shenzhen trading. It shares listed on the Hong Kong market were down .040% to HK $24.85 ($3.23) in late trading on Monday afternoon.

BYD, a Chinese battery and car manufacturer, has not been the greatest investment that Warren Buffett has made throughout the years. They recently released a very poor earnings report just this past Friday. In that report we learned that the company’s net profit dropped about 90% year-over-year to the amount of RMB 27 million. The news of this poor earnings lowered the price of shares by about 3%. This brings the total loss of the stock down 74% during the last five years.

The Warren Buffett era with this company started in 2009. At that time, he actually bought 10% of this company for a total of $230 million. This works out to be slightly over one dollar per share. The idea for this purchase came from his longtime business partner Charlie Munger. Berkshire Hathaway owns this company through their subsidiary MidAmerican Energy, and as recently as the 2012 second quarter, they are the second largest shareholder of BYD.

Because Buffett was capable of purchasing the shares at an insanely low price, it put him in a position where he practically couldn’t lose on this deal. Even though there has been a tremendous drop in the share price, his investment in the company is still profitable. This stock is currently trading at HKG13.36, which is equivalent to $1.71 in US currency. So his investment is actually still worth more than $385 million.

It is very difficult to tell whether or not this company is going to drop in value again in the future. BYD said that the results for the second quarter were very weak because there isn’t much demand in the domestic automobile market. This results from a mild domestic macros economy, coupled with five months of consecutive declines in GDP growth during the first quarter. The overall sales of motor vehicles in China were a total of 4.8 million units during the first quarter. This is a 3.4% decrease in year-over-year figures, which we learned according to the Chinese Association of Automobile Manufacturers. There was also a drop in the second quarter numbers, and the sales declined 1.25% in year-over-year figures. BYD’s sales of vehicles actually dropped a total of 8% in year-over-year figures.

In a recent statement, the company said “during the third quarter of 2012, due to the impact of macro-economic uncertainties at home and abroad, China’s auto demand is expected to remain weak, while market competition will intensify.”

BYD also suffered from a decline in their handset sales, which made a bigger impact than originally expected. Its largest customers lost market share in this area. The financial crisis in Europe, coupled with weak demand, was the reason why the solar energy cell sales fell during this quarter.

The investment in this company that Warren Buffett made could slowly become closer to a losing proposition, or it might even hit a breakeven point since BYD is predicting that they will continue to decline in handset and solar cell sales during the third quarter due to the uncertainty in the marketplace. They also feel that weak auto demand will continue in China, as well as intensified competition bringing sales numbers down.

One of the best areas that BYD has going for them right now is the S6 SUV model. This automobile model has sold over 100,000 units after only being on the market for a total of one year. It is actually the fastest seller in the Chinese SUV market. The company also has a minivan, which is model C3, that they plan on debuting in November of 2012.

The chairman of BYD, Wang Chuanfu, currently believes that out of every five Chinese alternative energy vehicles bought around the world, one of them will be from BYD. He mentioned this at the launch of the improved F3 compact car during August in Beijing.

There has been an overall increase in demand in the electric car market, and the hybrid and electric car sales have increased a total of 164% during June of 2012, when you compare those numbers to the same time in June of 2011. The sales trend for alternative energy cars usually drops rapidly when fuel prices peak, which we learned according to Kelly blue book. Although Kelly blue book expects gas prices to decline, they do not think that there will be a major drop in sales in the hybrid/electric car market.

Prior to Warren Buffett and Berkshire Hathaway investing in this company, it was experiencing very rapid growth. The company’s gross profit jumped from $1.7 RMB in 2004 to a total of $5.2 billion RMB during 2008. Warren Buffett also said that he is a great admirer of the chairman of this company, and that was one of the main reasons why he invested his money in a technology company that he does not completely understand. He also expressed that he believes we have a major need for alternative sources of energy. He mentioned on NBC last December that “land can get more productive, but oil is finite. Most fields are depleting at a pretty good rate,” he also mentioned.

When Buffett initially made his investment, the F3 from BYD was actually the biggest selling sedan in China. But as of July of 2012, it is now in 27^th place overall.

As of this past Monday, the overall stock market in China is down about 2.1% on the day. This is the worst loss this market has seen in about two months. It has not been down this low since March of 2009. According to Reuters, the market was negatively affected by nonbanking financials “on deflated hopes of more ‘formal’ monetary easing after the Chinese premier’s latest comments did not allude to that possibility.”

Even though Warren Buffett is not suffering a loss on this investment as of yet, there was a point during 2010 where his BYD shares were actually worth more than $1 billion. He hasn’t mentioned if he is going to sell the shares in the future, or if he’ll continue holding them for the long-term.

BYD Co., which is a Chinese carmaker that Warren Buffett and Berkshire Hathaway own a piece of, said that their first-half profits have plunged by a total of 94%. This profit is being dragged down by their handset units and solar cell units.

The net income of this company dropped to 16.3 million yuan, which is a total of 2.6 million American dollars during the six-month period which ended on June 30. This drop is compared to the of 275.4 million yuan that they made a year ago at the same time. The company sales rose however by 0.2% to a total of 22.6 billion yuan. We learned this in a statement that BYD gave to the Shenzhen stock exchange today.

The company BYD is a supplier of mobile phone makers HTC Corp. and Nokia OYJ. They mentioned that there first-half profits would drop about 95% during the month of April, because they suffered a decline in market share. They were also hurt by the debt crisis in Europe which affected their solar cell business. The delivery of vehicles also declined this year at BYB, and the F3 model which was very popular unfortunately waned because there is a lot more increased competition from the foreign car companies such as Volkswagen AG.

The company also made a statement that the nine-month income forecasts that they will give in September are expected to fall around 95% to 17.6 million yuan. “During the third quarter of 2012, due to the impact of macro-economic uncertainties at home and abroad, China’s auto demand is expected to remain weak while market competition will intensify.” This is a direct statement that BYD made today. They even believe that their handset and solar cell units are going to continue to decline during this nine-month period.

BYD Shares Fall

BYDs shares fell today a total of 2.8% to the amount of HK$13.36 during the trading hours in Hong Kong prior to the announcement. This gave the automaker a total of a 21% loss on the year. But on the flipside, the company’s Shenzhen-listed stock actually rose a total of 1.1% to 15.08 yuan today.

The revenue from their handset assembly and components division dropped a total of 11.6% from a year earlier, and it is now 8.6 billion yuan. Their rechargeable battery sales also fell this time around by a total of 5.5%, and that number was 2.4 billion yuan. We learned this in a statement that they gave today. Their automobile sales actually increased by a total of 12.7% to the amount of 11.6 billion yuan. Their total vehicle sales actually fell 11% during the first seven months of the year, and dropped to 231,902 units. This is being compared with the 19% gain that Volkswagen achieved during the same time with their eponymous brand that rose up to 1.1 8 million. This data was derived from industry researcher LMC automotive.

Throughout the entire industry, passenger car sales actually rose a total of 7.5% to the amount of 8.74 million units during the first seven months. This information was gathered from the China Association of Automobile Manufacturers. The shares of BYD actually dropped the most it has in more than two months in Hong Kong during the month of May when a newspaper reported that three people were killed during an accident that took place in one of their E6 electric taxis. The car unfortunately caught fire after the crash and killed the passengers. But the official investigations found that there weren’t any flaws in the safety design of the vehicle, which we learned when the company told us on August 3.

Midsized Sedan

BYD actually introduced the Su Rui, which is a midsized sedan. They introduced it in Beijing this August, and they are using it as a way to expand their overseas sales in markets such as Uruguay and Israel. They are providing fleet trials of its electric buses, the company told us today.

MidAmerican Energy Holdings Co., which is also a unit of Berkshire Hathaway, actually bought out 9.9% of BYD during the month of September in 2008. They did this as a way to tap into the rising demand of clean technology. After Buffett invested in the company, the shares of BYD rose ninefold and hit a record high of HK$85.50 in Hong Kong on October 23, 2009.

There are 21 analysts that cover the stock, and none of them actually recommend BYD as a buy. 12 of the analysts have this company rated as a sell, and the other nine recommend it as a hold. This is information that was gathered from data compiled by Bloomberg.

Berkshire Hathaway, investment company run by Warren Buffett, owns 10% of the Chinese automaker BYD. News was just released saying that the automaker needs to cut its workers payments between the months of June and September. The reason being that it is struggling from weak profits and sales. This was reported by Chinese media earlier yesterday.

The pay cuts being handed out at BYD are going to be across the board in every department. It will be a combination of lower bonus payments and salaries and it will reduce the overall combination of the two by 14%, which was reported by Southern Metropolis Daily yesterday as well. This move is expected to save the company the equivalent of $38 million, which is also 240 million yuan.

A struggling BYD has been experiencing very slow growth in the auto market in China, which is currently the largest auto market in the world. The company has dropped 89% in first quarter profit due to 8% lower sales volume when comparing the statistics to the same three months of last year.

The company also suffered a major image setback. One of their battery run cars was in a collision last month and it caught fire. Shares of the company have fallen around 40% in this last year.

Wang Chuanfu, chairman of BYD, is ranked number 56 on the Forbes China Rich List for 2011. His estimated wealth is $1.52 billion.