By Colum Murphy 
 

SHANGHAI--BYD Co. (1211.HK), the Chinese electric-car maker backed by U.S. investor Warren Buffett, saw its Hong Kong-traded shares fall as much as 40% Thursday afternoon amid a worsening outlook for the Chinese car market and lower oil prices.

The reason for the sharp drop wasn't immediately clear. A BYD spokeswoman said the company's operations remained normal and that it didn't see an explanation for the fall. "Everything's well," she said. "I think it's market behavior. We'll pay attention to it."

The company is the Hong Kong's most heavily-traded stock on Thursday, with 5.84 billion Hong Kong dollars (US$753.1 million) worth of shares traded as of 0754 GMT. The benchmark Hang Seng Index was up 1.2%.

The spokeswoman said she didn't think the selloff had any links to shareholder Berkshire Hathaway Inc. (BRKA), in response to a question about whether the U.S. company, which is controlled by Mr. Buffett, had anything to do with the sharp declines.

BYD's shares gained a bit back later Thursday, and were trading late in the session at HK$24.90 Hong Kong dollars, down 29%.

In a statement to the Hong Kong stock exchange Thursday afternoon, BYD said it wasn't aware of reasons for the "unusual decrease in the price and unusual increase in trading volume" of the Hong Kong-traded stock.

Write to Colum Murphy at colum.murphy@wsj.com

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