BYD reduces shifts at two assembly plants in China

BYD has reduced shifts at two auto assembly plants in China, sources said, in a sign of how weaker demand in the world’s largest car market is affecting its best-selling electric vehicle brand.

BYD, which outsells Tesla in China, asked some of the workers at its Xian plant, its biggest manufacturing hub, to work only four days a week in a factory running two eighthour shifts a day, according to three people and an internal memo sent earlier this month.

The Xian plant makes BYD’s top-selling Song and Qin EV sedans.

BYD also reduced shifts at its Shenzhen plant, which makes its Han sedans, from three shifts a day to two a day, four people with knowledge of the development said.

BYD declined to comment. The sources declined to be identified because the production schedule is private.

BYD did not give a reason for the reduced shifts in its planning memo.

One of the sources said BYD was throttling back on production in the face of weaker industry-wide demand in China since the start of the year.

It was not clear how long the reduced shifts would last for BYD and if any of its other three assembly plants in China were affected by production schedule changes.

It was also not clear how the reduced shifts would translate into production volume changes.

BYD has been growing fast and taking market share in China.

Last month, it outsold Volkswagen-branded cars in the country for the first time.

BYD also outsold Tesla by more than five times in the first two months of the year.

But the company has also been slowing output since the start of the year, when industry-wide sales began to slow and China ended a national subsidy programme for EVs and plug-in electric vehicles.

Analysts have credited aggressive discounts for creating some demand as other automakers have followed Tesla into what has become a price war over market share but industry-wide inventories have been rising.

BYD produced 5,749 cars in January and last month on average a day, 22% fewer than its average daily output in October and November, according to China Association of Automobile Manufacturers data.

Total sales of BYD, including exports and to dealers, increased 89% in the first two months compared with a year earlier, the company has said.

But retail sales, based on insurance registration data, showed slower growth of 66%, data from China Merchants Bank International showed.

To spur demand, BYD began offering discounts for its bestselling Yuan Plus and Seal EVs this month.

The company also launched refreshed versions of its Han sedan and Tang crossover last week.