BYD suspends minivan project due to lack of capital

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BYD have suspended production of their minivan range before it has even begun according to media reports which cite a lack of investment as a major reason.

In August 2008 BYD bought Changsha based Midea bus company with a plan to make electric buses and invest 3 billion RMB into the factory.

In the last half of 2010 BYD was hit by a string of issues, the biggest being a sudden drop in sales with April 2010 sales being down 12% over April 2009 sales, continually poor sales left BYD with a shortage of cash to invest in other areas. The proposed mini –van was set to enter BYD’s ‘C Sales Network’ which is targeted at suburban and rural car buyers.

BYD’s decision to shelve the minivan project may not have only been down to a lack of investment funds, the shrinking rural market may have been a deciding factor. The ‘Cars to the Countryside’ program which saw subsidies given to car buyers from rural areas ended late last year and subsequently saw a large drop in minivan sales in the first quarter of 2011, sales are down 5.6% over 2010’s first quarter sales.

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