Buffett and GM Buy Into Chinese Auto Industry

The chairman of a Chinese electric-car and battery maker says Warren Buffett wants to buy more of his company, but may not be able to.

Berkshire Hathaway’s MidAmerican Energy Holdings already owns about 10 percent of BYD Co. Ltd., after investing $230 million in the company. Now, “MidAmerican has always intended to raise its stake in BYD because it believes BYD has good prospects in the development of renewable energy, but we are still considering (whether to sell more),” BYD chairman Wang Chuanfu told Reuters Monday.

BYD plans to sell its e6 electric car in the U.S. in 2010. That’s a year ahead of schedule and puts BYD in line to compete with General Motors in the U.S. electric-car market as that market develops. GM plans to roll out its Chevrolet Volt in 2010.

By 2025, BYD plans to sell as many as 9 million hybrid and rechargeable electric vehicles.

While Buffett eyes a bigger stake in the Chinese electric carmaker that wants a piece of the U.S. market, GM is putting more skin in the game of selling autos in China.

The U.S. automaker is starting a 50-50 joint venture with the Chinese automaker FAW Group. The two companies will put up a combined $293 million in the venture in the Northeastern Chinese city of Changchun. They will expand FAW’s existing light-truck and van production capacity by about 100,000 vehicles a year.

"For us in China, this is an important complement to the rest of our portfolio," Kevin Wale, president and managing director for GM's China operations, Reuters reports. "We are well established in passenger vehicles and mini commercial vehicles, and we haven't had a presence in the truck segment. Adding a truck portfolio rounds that out."

China’s light-commercial-truck market is more than 50 percent of the world market for such vehicles.

China is a key growth area for GM, which has emerged from bankruptcy and is looking to return to profitability. GM’s China sales shot up compared to last year by 42.8 percent from January to July, to 959,035 units.