Net income fell to 490 million yuan ($75 million) in the three months ended Dec. 31 from 1.46 billion yuan a year earlier. The fourth-quarter figure was calculated by Bloomberg by subtracting nine-month earnings from the full-year results announced by the company in a statement to the Hong Kong stock exchange.

Rising competition from rivals General Motors Co., Volkswagen AG and Nissan Motor Co. led BYD to cut prices on its models last month as sales plunged for seven straight month.

BYD, whose F3 sedan was China's best-selling car the last two years, missed sales targets last year even after slashing the target by 25 percent to 600,000 vehicles.

Some of the company's key models were late to qualify for the government's 3,000 yuan subsidy for fuel-efficient vehicles, hurting sales, analysts say. The company also cut prices by as much as nine percent mid-2010 in order to clear dealer inventory, he wrote.

The automaker's full-year earnings fell 28 percent to 2.9 billion yuan. Sales in 2010 increased 18 percent to 46.7 billion yuan from a year earlier. The company declared no final dividend.

BYD, headed by chairman Wang Chuanfu, missed its 2010 delivery target by 13 percent, selling 519,806 cars. To revive sales growth, BYD slashed prices of five car models by as much as 15,000 yuan last month.

GM, Honda and Nissan are also adding new, lower-priced brands in the world's largest auto market, while the government in January ended tax incentives that helped boost sales over the last two years.

Xia Zhibing, BYD's head of sales, wrote on his blog last month that the company, 10 percent owned by Buffett's Omaha, Nebraska-based Berkshire Hathaway Inc., is "preparing for a price war."

China's vehicle sales surged 32 percent to a record 18.06 million in 2010, helping the nation remain the world's largest auto market for a second year.