The Chinese electric car manufacturer BYD also wants to gain a foothold in Europe.
The first cars of the brand are to be sold in Germany in autumn.
With a market launch in Germany, China's electrical manufacturer BYD wants to gradually become a global car manufacturer.
Its diversification brings a lot of manufacturing advantages to the Shenzhen-based private company.
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Shenzhen/Berlin – It is a brand name that promises great things: "Build your dreams" (BYD).
The Chinese carmaker from Shenzhen has attracted a lot of attention in recent months because the brand is in the fast lane economically.
Two figures prove this very clearly.
For one: 300 percent.
That's how much vehicle sales grew in the first half of 2022.
Despite lockdown, lack of chips and supply chain disruption.
BYD sold over 641,000 vehicles, almost 80,000 more than the supposed best-in-class Tesla.
The second number: nine billion dollars.
That's what the shares in BYD that Warren Buffett bought in 2008 for $235 million are now worth.
Today the brand is worth more on the stock exchange than Volkswagen.
And it has left the German group behind in terms of electromobility in China.
BYD: So far only one dealer in Germany
BYD is currently celebrating this success primarily in its home market of China.
But the company also wants to be at home in Western markets.
The expansion is initially still being taken in cautious steps.
But if it succeeds in establishing itself in traditional car countries like Germany and the USA, then BYD would have made it - and would have risen to become a global car manufacturer.
The South Korean brand Hyundai recently succeeded in doing this among the Asian suppliers.
There was a lot of hype in specialist circles about the start of BYD in Europe.
However, it goes unnoticed that the company is only just beginning to recruit dealers.
BYD recently found a sales partner for Germany and Sweden: the Hedin Mobility Group.
The company has 235 locations.
But there is only one of them in Germany, in Bremerhaven.
According to the annual report, a single employee sold a total of eleven Dodge cars there in 2021.
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BYD in China: success through wide bandwidth
BYD's success in China is due to the private company's broad positioning.
It has existed since 1995. At that time, BYD was still manufacturing batteries for mobile phones and MP3 players.
It was not until 2003 that company founder Wang Chuanfu diversified his business and started developing electric cars.
The battery and e-car divisions were so successful that BYD is now one of the world's largest manufacturers of batteries.
In addition, every fourth electrified car in China - pure electric cars and hybrids - comes from BYD.
The only reason why the share is not even larger is the lack of production capacity.
A bottleneck that the recently opened fifth factory at least alleviates somewhat.
Thanks to her, the brand will be able to produce 3.4 million cars a year in the future.
Unlike many competitors, BYD has a fairly secure supply of raw materials.
The company not only has its own battery factories, but has also owned mining rights for lithium in Chile since the beginning of the year.
In Africa, the brand wants to take over six more mines.
Dismantling and production are so smooth and the end product is of such a high standard that even Tesla would like to buy batteries from the competitor in the future.
The batteries from BYD also do without cobalt.
Thanks to the subsidiary BYD Semiconductor, the brand also has the chip shortage under control.
The company also produces semiconductors for automotive systems.
BYD is currently negotiating an IPO with the Chinese stock exchange regulator.
This is to raise funds for research and development.
Diversification and production in China: cost advantage for BYD
Due to the diversification along the value chain, BYD has enormous cost advantages compared to the competition in addition to the security of supply.
Although batteries have become cheaper and cheaper over the years, they still account for around a third of the cost of an electric car.
BYD is also accommodating with a law: In China, electric car manufacturers have to collect batteries again.
The car manufacturer has also diversified here and was the only car manufacturer to open a recycling factory for batteries.
BYD will also rely on these advantages when launching the market in Europe - and will have to have staying power.
Experience has shown that new brands find it difficult, especially in Germany.
Lexus never got beyond a niche role, and Infiniti went out of business altogether, although Toyota and Nissan are behind it with European-experienced groups.
But that doesn't deter BYD.
On the contrary.
In 2022, the brand wants to sell 20,000 cars in Europe.
Given that there were just 1,000 units in 2021, this is a very ambitious plan.
Even from the original 200,000 pieces issued once in 2023 - a fantasy of expansion from the pre-corona era - Wang Chuanfu has never moved away.
By Christian Domke Seidel
The journalist Christian Domke Seidel
, who specializes in car topics,
works regularly for the
China.Table Business Briefing
.
This article appeared on August 10, 2022 in the
China.Table Professional Briefing
newsletter - as part of a cooperation, it is now also available to the readers of the IPPEN.MEDIA portals.
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