2024-03-13 06:30:00
BYD, the Chinese electric car maker, has encountered challenges overseas as it discovered that rapid growth at home may not translate quickly into success in large overseas markets such as Europe.
BYD executives said problems encountered in going overseas include weak market demand, excessive pricing, quality control issues and internal disagreements within the company over how quickly it should capture market share. Late last year, BYD surpassed Tesla to become the world’s largest electric vehicle manufacturer in terms of sales.
BYD executives say some of the problems that have arisen show the company’s inexperience, such as how to deal with mold inside cars and thousands of cars piling up in European warehouses.
BYD’s meteoric growth, largely in its home market of China, has taken the electric vehicle industry by storm. BYD has become China’s largest domestic car company in terms of total sales.
Executives say BYD is unlikely to meet its leadership’s internal goal of selling 400,000 vehicles outside China this year. BYD’s sales in overseas markets last year were 242,765 vehicles. The lack of sales is partly due to slowing growth in global electric vehicle sales, as well as BYD’s own problems.
BYD will sell regarding 16,000 vehicles in Europe in 2023, according to registration data compiled by Jato Dynamics, below the company’s internal sales target for the continent the previous year.
A BYD representative said the Wall Street Journal report was inconsistent with the facts. The company did not mention what specific discrepancies there were.
The representative said BYD is satisfied with the results achieved by its overseas teams, including the European team. The representative also said that BYD has only been exporting electric vehicles for two years and is confident in its overseas business development.
Under the leadership of Chairman Wang Chuanfu, BYD hopes to follow in the footsteps of Japanese and Korean car companies and become one of the international brands.
The company backed by Warren Buffett is strong, with profits of regarding $4 billion in 2023, nearly double the previous year. BYD’s market value has lost more than a fifth since last summer due to concerns regarding slowing electric vehicle growth, but it remains above $70 billion, higher than that of Ford Motor or General Motors. market capitalization.
BYD’s Asian forerunners have also experienced setbacks in overseas markets. In 1991, South Korea’s Hyundai had to recall almost all Excel models produced between 1986 and 1989 and sold in the United States; the Excel was among the company’s most popular models with Americans at the time because of an engine problem that might cause misfires. . Hyundai offered warranty packages to regain favor with consumers; its quality ratings have since improved.
So far, BYD has avoided major quality issues that would affect a large number of consumers. However, there have been some incidents affecting passenger cars and commercial vehicles.
In January this year, a BYD bus caught fire in London, causing relevant British authorities to recall nearly 2,000 buses. No one was injured in the incident. Authorities said the vehicles had problems with their heating, ventilation and air conditioning systems that might cause fires if left unattended.
One concern within BYD is how many times passenger models exported from China need to be restored or repaired before they can be sold to consumers.
Company executives and those who work on the cars said it is common in the industry for cars to be refinished following they are imported, but BYD models tend to require more extensive restoration than most, which they feel is partly a reflection of the company’s handling of the cars. Inadequate experience in long-distance logistics.
They say vehicles recently arriving in Japan have surface blemishes such as dents, scratches and parts that need to be replaced to comply with local standards, while in Europe some vehicles arriving from China are suffering from mold. They say mold is known to grow in cars that are transported over long distances, so the issue is not mold but the concern that these vehicles are not treated with a professional ion process to completely remove the mold.
A series of quality problems at BYD have been exposed, including complaints in Thailand that paint and plastics were peeling off, and in Israel that the car body was deforming under the weight of the roof rack. Sales of BYD electric cars have been strong in Israel. A BYD executive said that the evaluation of BYD cars by overseas customers is like “going to a decent restaurant to eat, only to find that the plate has chips.”
BYD executives have raised concerns within the company that the way exported cars are repaired at their destinations, while adequate for a small number of vehicles, is not feasible for the large-scale business BYD hopes to build.
People at BYD say global sales targets set by the company’s top leadership are allocated to local business executives by region, but these targets often do not take into account the conditions in each market.
The company’s sales targets caused friction at a meeting late last year. One of BYD’s European executives questioned the feasibility of the targets, saying Europe’s targets were unattainable due to weak demand and the need to address quality issues, according to people who attended and were briefed on the meeting.
Wang Chuanfu has raised questions regarding the drive of European leadership, and he and other executives have stepped in to become more directly involved in managing European operations, these people said.
BYD’s cars sell for much more overseas than they do in China, making the company less competitive on price with well-known brands. To expand profit margins, BYD’s flagship export model Atto 3 is priced at more than $41,000 in Germany. After factoring in price cuts from BYD and Volkswagen, the price is 5 percent lower than Volkswagen’s comparable ID.3 compact electric crossover. Germany is BYD’s largest market in Europe.
The same BYD car sells for less than US$20,000 in China.
Analysts and dealers said that subsidies for purchasing electric vehicles in Germany were withdrawn at the end of last year. BYD failed to seize the sales opportunity before the sales of electric vehicles in European countries declined. By the time it launched its dealer network, new models and product promotions, it was already too late. Night.
BYD has begun chartering ships from shipping companies to ship its cars to Europe and other regions. The first transport ship capable of transporting up to 7,000 cars set sail in January this year, and Wang Chuanfu later said in February that the company planned to use seven more ocean transport ships in the next two years.
Meanwhile, BYD had more than 10,000 passenger cars in inventory in European warehouses as of the end of last year, company officials said. The certificate authorizing sales of the cars in the EU is regarding to expire, meaning BYD may not be able to sell the cars in Europe.
Currently, BYD’s largest export markets are Thailand and Brazil. In these two countries, BYD is the best-selling pure electric brand, driving the growth of electric vehicles in these two emerging markets. BYD will open new plants in these two countries, as well as in Uzbekistan and Hungary.
BYD sold more than 12,000 vehicles in Australia last year, one of the company’s overseas highlights. In January this year, BYD also began offering cash rebates of more than $1,300 on its most popular electric vehicle models in Australia.
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