- BYD has slowed production and expansion in recent months, reducing shifts at some of its Chinese factories and delaying plans for new production lines, Reuters reported.
- These measures have been implemented at least four factories, and BYD has also suspended plans for some new production lines.
BYD (HKG: 1211, OTCMKTS: BYDDY) is reported to have slowed down its vehicle production in China and reduced some capacity as its sales growth has slowed.
The company has slowed production and expansion pace in recent months, reduced shifts at some Chinese factories, and delayed plans for new production lines, Reuters reported today, citing two sources familiar with the matter.
Sources said BYD has canceled night shifts and reduced output by at least a third of the capacity at some of its factories, according to Reuters.
One of the sources said these measures have been implemented at least four factories, and BYD has also suspended plans for some new production lines.
These decisions suggest that BYD's strong sales growth over the past few years may be slowing, as the company faces rising inventory pressures even after significant price cuts in China's automotive market, Reuters noted in its report.
One source said the measures aim to cut costs, while another source said they were implemented after sales targets were not met, the report noted.
BYD operates at least seven car factories in China and plans to increase sales by nearly 30 percent this year to 5.5 million units, the report noted.
In 2024, BYD's new energy vehicle (NEV) sales totaled 4,272,145 units, up 41.26 percent year-on-year.
By comparison, its annual sales growth rates for 2021-2023 were 218.30 percent, 208.64 percent, and 62.30 percent, respectively, according to data compiled by CnEVPost.
In the first five months of this year, BYD sold 1,763,369 NEVs, representing a year-on-year increase of 38.70 percent.
A month ago, BYD implemented widespread price cuts for its Dynasty and Ocean series models, prompting several domestic automakers to follow suit, sparking an intense price war.
Deutsche Bank attributed BYD's price discounts to the rapid growth of dealer inventories in a research note at the time.
In the first four months of 2025, BYD's dealer inventory increased by about 150,000 units, equivalent to half a month's retail volume, according to analyst Wang Bin's team.
"According to our dealer checks, BYD's dealer-level inventory is currently at 3-4 months, likely the maximum level that the dealers can bear," the team wrote.
Therefore, BYD decided to launch more promotional activities to reduce dealer inventory, the team said.
The average inventory level for BYD dealers stood at 3.21 months, the highest among all brands in China, while the industry-wide inventory level was 1.38 months, according to a survey conducted in May by the China Automotive Dealer Association (CADA), as reported by Reuters today.
According to official media reports last month, a large BYD dealer in Shandong province has gone out of business, with at least 20 of its stores found to be deserted or shut, the report noted.
