Chinese battery and vehicle maker BYD Co plans to cut salaries due to sharply lower profits amid lackluster market performance.
According to an internal document, BYD will cut bonuses between June and September by 18 percent, which will make the total earnings of employees in the Shenzhen-based company slide by 14 percent during that period.
The move is expected to reduce by about 240 million yuan ($38 million) the human resource costs for the Warren Buffett-backed company. BYD reported a net profit of 1.39 billion yuan in 2011.
In the first quarter, BYD sold 110,000 vehicles, down 8 percent from the previous year.
China’s automobile market slowed down in 2011, after two strong years. The continued slowdown of the domestic market brings challenges for China’s homegrown auto brands, including BYD.
The market share of domestic auto brands has dropped for three consecutive months. The downturn trend is expected to continue as the market is seen stagnating.