(Yicai) Sept. 2 -- Harmony Auto Holding’s shares closed down over 12 percent after surging higher in the wake of the Chinese luxury car dealer revealing that auto giant BYD will invest USD40 million in its overseas-focused subsidiary to speed up the unit’s expansion.

After jumping 13.8 percent at the market open, Harmony Auto [HKG: 3836] finished lower at HKD2.10 (20 US cents) a share. The stock has still nearly quadrupled in value so far this year. 

BYD will pay cash for about 10 percent of iCar Group, which handles the automaker’s overseas sales and after-sales services, Zhengzhou-based Harmony Auto said yesterday. The new funds will be used for general operational purposes.

Ningde-based BYD, which sold the most electric cars globally in the last three years, aims to double its overseas sales to more than 800,000 this year, with a longer-term ambition to sell half of its vehicles outside of China by 2030.

Harmony Auto handles more than 10 luxury brands, including BMW, Ferrari, and Lexus. In 2023, the company shifted gears to help Chinese electric carmakers go global, forging alliances with BYD and GAC Group.

In just two years, Harmony Auto has opened 100 BYD dealerships across 20 countries and regions, including Hong Kong, the United Kingdom, France, Switzerland, Japan, Australia, Malaysia, Indonesia, the Philippines, and Singapore, according to company filings.

BYD’s investment reflects their long-term partnership, the dealership said. It will not only boost BYD’s overseas sales but will also enhance Harmony Auto’s capital structure and competitiveness.

Harmony Auto has a 55 percent stake in iCar and Epower Global, a company controlled by Harmony Auto Chairman Feng Changge, owns the rest. After BYD’s investment, their stakes will fall to 49.5 percent and 40.5 percent, respectively. ICar will remain a unit of Harmony Auto and will continue to be consolidated into its financial statements.

Editor: Kim Taylor