©Reuters.
Investing.com — Shares of Chinese electric vehicle maker BYD Co Ltd (SZ:) rose on Monday after Chairman and CEO Wang Chuanfu announced plans to double the size of the share buyback. The price rose in response to the proposal.
BYD's Hong Kong shares (HK:) rose 1.9%, while the EV maker's Shenzhen-listed shares rose 2%.
BYD's CEO proposed doubling the amount of A shares to be repurchased under the share buyback proposal to 400 million yuan ($56 million). The move was primarily aimed at halting BYD's stock's recent sell-off, even though BYD recently overtook Tesla Inc. (NASDAQ:) to become the world's best-selling EV maker.
But even as BYD overtook Tesla, the company, along with the broader EV sector, was hit by growing concerns about an impending sales slowdown. BYD's stock price fell more than 22% in 2023.
Although China remains a strong source of demand for EV sales, overseas sales slowed significantly in 2023 as hybrid models regained popularity. Deteriorating economic conditions, with inflation and interest rates rising in several developed countries, also weighed on car sales.
This cast doubt on BYD's expansion plans overseas, particularly in Europe and North America.
Still, BYD announced and launched a number of new models in February, the latest being the Yangwang U9 supercar.
The Berkshire Hathaway-backed company has expanded its luxury offerings in recent months on the view that the high-margin segment still has some demand. Consumer spending in China is seen to have increased during the Spring Festival holiday.
