Dream deferred

IF ANY company captured the optimism (and possibly hype) emanating from China, it was BYD, whose three letters are said to be short for “build your dreams”. The Shenzhen-based company makes mobile-phone batteries, cars and solar panels, thereby combining growth prospects with green virtues. This appealing combination received a credibility boost in 2008 when a subsidiary of Warren Buffett’s Berkshire Hathaway bought a 10% stake.

Mr Buffett seemed to have picked another winner. Within a year the price of BYD’s shares had risen ninefold. The battery business, which had been a huge success, was drifting, but car sales were accelerating at a stunning pace, from none in 2003 to more than 500,000 last year, including the F3, a small sedan with a modest 60,000-yuan ($9,150) price tag and numerous features like electric windows, cup-holders and iPod docks, which quickly became the most popular car in China.

Mr Laprise is still waiting for delivery; and BYD has announced a series of delays to another hybrid, intended for the American market. Meanwhile, in the hypercompetitive Chinese market, the F3 is suddenly an old model. Geely, another Chinese manufacturer, has an equally inexpensive but more modern car that is this year’s flavour. “Chinese buyers are proving to be more loyal to features than brands,” says Mr Laprise. “When something nicer comes along, they buy it.”

1. BYD makes mobile-phone batteries, cars and solar panels, etc.

2. Within a year the price of BYD’s shares hadn’t changed.

3. A small sedan, F3, became the most popular car in China because of numerous features.

4. Another Chinese manufacture has an expensive and more modern car.

5. Chinese customers are more loyal to brands than to features.