The 225 million shares represent around 10 percent of the total amount of buyable shares in the company, and cost Buffet 1.8 billion Hong Kong dollars, or about 230 million US dollars. BYD as a whole is an IT company specialized in mobile phone components and rechargeable batteries, but the 2003 decision to get into the automobile manufacturing business sets it apart from other IT companies.
Like acquiring the Shaanxi Qinchuan Auto Co Ltd. and thereby entering into car making wasn't enough, the automotive branch of BYD chose a logo which more than resembles the one BMW has. Like almost any other respectable Chinese car company, the current range in their line-up consists of two cars which are almost 100% copycats of western models. Nevertheless, with less than five years of car making history, BYD Auto sold close to 100,000 cars just last year.
As impressive as this may sound, what might have really attracted Warren Buffet to invest was the synergy between the automotive and the battery business. The reasons might not stop here though. At the 2008 NAIAS in Detroit, BYD Auto showcased a new battery formula called lithium-fe, which apparently has some pretty impressive parameters for its specifications. Considering that the Chinese firm has the technology, the man-power and most importantly maybe, the reduced costs involved in manufacturing, Buffet's decision might not seem like an odd one at all.
Google News