Bump Your Dealers

by Bertel Schmitt

Published: January 17th, 2011

And here another BYD first: BYD is the first Chinese company to perform a massive dealer cull. “BYD has admitted its sales network grew too fast and has cut the number of dealerships by 100,” reports People’s Daily.

BYD had created a 1,200 dealer network to keep up with the projected demand for 800,000 cars. By the end of last year, BYD had sold only 520,000 cars. BYD’s annual growth of 15.5 percent was less than half of the overall Chinese market.

For this year, BYD has set more conservative goals: They estimate an increase of 10 percent to about 550,000 cars. The company still wants to go ahead with its planned mainland A-share stock listing.

#BertelSchmitt #BYD #China #Dealers

Bertel Schmitt

Bertel Schmitt comes back to journalism after taking a 35 year break in advertising and marketing. He ran and owned advertising agencies in Duesseldorf, Germany, and New York City. Volkswagen A.G. was Bertel's most important corporate account. Schmitt's advertising and marketing career touched many corners of the industry with a special focus on automotive products and services. Since 2004, he lives in Japan and China with his wife <a href="http://www.tomokoandbertel.com"> Tomoko </a>. Bertel Schmitt is a founding board member of the <a href="http://www.offshoresuperseries.com"> Offshore Super Series </a>, an American offshore powerboat racing organization. He is co-owner of the racing team Typhoon.

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7 comments

Forraymond on Jan 17, 2011

Can you explain why this company is not selling better and why they have not brought their wares to the US? With all the backing of Berkshire-Hathaway, it seems that they would have gotten through any red tape the US could create.

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- Jerry Hightower on Jan 17, 2011
  
  Have you seen their designs? Old fashioned, uninspiring, outdated and ugly.
  
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- PeriSoft on Jan 17, 2011
  
  Given that they're cheap crap copies from a company that, until recently, couldn't even design its own logo (Think about how utterly pathetic that is for a minute), and builds cars that probably couldn't protect their drivers from a collision with a Vespa, it's not a huge surprise. People get all misty-eyed about the success of Chinese car companies, but they're riding a really tiny window of opportunity - a huge economy in the midst of a growth spurt, a burgeoning middle class that never owned cars before, a complete lack of local safety or workers' rights regulations, no consequences for cut-and-paste copying of other companies' designs, and an utter contempt for honor. Aside from the last one, none of those will be permanent - I suspect that the situation will be quite a bit different when the Chinese' companies temporary advantages go away, and they have to compete on a level playing field. Or maybe, based on this article, sooner.
  
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Omnifan on Jan 17, 2011

Not everything Warren Buffett touches turns to gold. Maybe BYD's product just isn't all that good.

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SCE to AUX on Jan 17, 2011

What, no hearings on unfair culling? Where's the outrage from the Chinese congressmen trying to protect jobs in their districts?

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- Forraymond on Jan 17, 2011
  
  They are Politicians, like every Politician, they do not give a crap about those who voted for them - only those who pay them off.
  
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Stuki on Jan 17, 2011

Why, o why, when those places that have been through the initial car-ification of society before, almost all wish they were not tied down with all manners of red tape with regards to their dealer network, does upstart Chinese companies insist on following what seems to be the exact same model? What about building the darned cars, and let local versions of Wal-Mart, Amazon, 7 eleven or whatnot sell them, and the Geek Squad fix them? It's as if tying hairballs is some sort of universal obsession with those in the auto industry, with everyone from workers to dealers to local governments to banks to federal governments to activist groups all clinging together like desperate, drowning men, stomping on eachother to keep their own head above water. Over here, at least one can blame early naivete for getting stuck with needlessly rigid contracts, and lawyers, lobbyists and others in the profit-from-hairballs trade for ensuring the clusterbang continues, but why anyone would want to emulate it in a greenfield market, is beyond me.

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