BYD Falls on CCTV Report of Airbag Flaws

Date:2011-09-16     Source:hangmeilile  Text Size:

(iChinaStock News) Shares of Warren Buffett-backed car maker BYD Auto (01211.HK) fell 6.3% in Shenzhen on Tuesday after CCTV reported that the airbags on its popular F3 model cars failed to open in several crashes.

In an investigative program on last Sunday, CCTV reported two car accidents in which airbags of several F3 compact cars failed to inflate in collisions, leading serious injuries. CCTV reported that BYD refused to give any compensations to its customers and insisted that there are no flaws in its airbags.

BYD is a Chinese automobile manufacturer based in Shenzhen. It became well-known in 2008 when Warren Buffet invested $230 million for 10% stake in BYD Auto’s parent, BYD Company, a rechargeable battery maker.

In 2008, Mercedes Benz once faced similar charge after an car accident and had to pay about RMB 650,000 in compensation.

Given the influence of CCTV’s report, BYD may need a while to recover its reputation. The company has seen a sharp decline in its stock price recently. In Hong Kong in the last two years, it fell from 88.4 HKD at its peak to 15.04 HKD at present. In Shenzhen in the last three months, it fell from 34 yuan at its peak to 21.12 yuan at present.

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