BYD Likes the Car Thing, Wants to Unseat Toyota

Edward Niedermeyer
by Edward Niedermeyer

“It’s our company’s long-term target, to be China’s No. 1 automaker by 2015 and to be the world’s leading car maker by 2025,” Build Your Dream’s marketing reps tell the AP. Ready for a reality check? BYD sold only 400k units last year, almost all of them in China. In fact, just a few years ago BYD wasn’t an automaker at all, but a battery supplier to laptop and cell phone companies. Several years and a big investment from Warren Buffet later, BYD is getting all kinds of cocky.

Analysts claim that BYD’s goal of beating Toyota by 2025 is “realistic” because China and other Asian markets show more promise for growth than the relatively mature US and European markets. Still, BYD’s a long way from even dominating the Chinese market. GM sold 814,442 units in the first half of 2009, followed by Volkswagen which moved 652,436 vehicles. BYD sold only 246,881 in the first three quarters of this year.

Breaking into the US and Europe seems to be an even tougher nut to crack. Chinese vehicles face the mother of all “perception gaps,” thanks to China’s reputation as a source of cheap, low-quality goods. Although BYD’s battery and hybrid drivetrain technology appear to be world class (after all, BYD’s F3DM is the world’s first plug-in hybrid), it takes more than a slick drivetrain to satisfy picky consumers in mature car markets. Oh yeah, and the BYD system has yet to be independently tested by western auto journalists.

BYD’s recent announcement of a forthcoming EV MPV illustrates a number of the challenges facing the firm as it builds towards its goal of 10m global sales by 2025. That vehicle will probably cost $40K by the time it arrives, suggesting that potential quality issues could become problems of brand-aborting stature. As one analyst puts it, the first wave of BYDs are “all about advertising and brand building.”

The implication is that initial volume and pricing don’t matter. BYD needs to “just let the world know you are the world leaders and then see what happens,” according to the same analyst. But that’s not a strategy, it’s pure hubris. Just ask GM how that strategy has worked out.

Edward Niedermeyer
Edward Niedermeyer

More by Edward Niedermeyer

Join the conversation
2 of 27 comments
  • Anonymous Anonymous on Sep 19, 2009

    "wsn : September 18th, 2009 at 4:58 pm B10er, I am just against double standards. No matter how you spin it, the Porsche logo and the Ferrari logo are just too visually close." What in the world are you talking about???? In my very long life as an auto enthusiast, and having seen 1,000 Porsches and 1,000 Ferraris, I NEVER, EVER, Not even ONCE, not even REMOTELY, confused the one with the other, regardless of how many similarities you were able to find in the two logos (this reminded me of these kid's games where they are shown two identical pics and are told to find the six differences. In this case, you got two totally different logos and found... the 6 similarities! Good Job!) HOWEVER, I WAS indeed DUPED when I, as I said, "Speed-read" (or "SPeed-saw" the BMW'ish BYD logo, the similarities were way too obvious. Again, BYD itself proves my point, since they hastily changed the logo, afraid of BMW retaliation and lawuits where BYD would lose BIG TIME..

  • BuzzDog BuzzDog on Sep 19, 2009

    Autosavant +1 Let me put it this way: I've had both Porsches and BMWs in my household at one time, so I'd like to think I'm somewhat familiar with the appearance of both. At a quick glance, I've never have been "duped" into mistaking the Ferrari logo for that of Porsche. Can't say the same for BYD/BMW. Your mileage may vary, but I don't think my cognitive abilities are all that unique. Besides, you hear immediate - and loud - outrage, even from non-enthusiasts, over the BYD/BMW to explain why you never seem to hear the same over the "similarities" between the logos of Porsche and Ferrari?

  • Socrates77 They're pinching pennies for the investors like always, greed has turned GM into a joke of an old corporate American greed.
  • Analoggrotto looking at this takes me right back to the year when “CD-ROM” first entered public lexicon
  • Alan My comment just went into the cloud.I do believe its up to the workers and I also see some simplistic comments against unionisation. Most of these are driven by fear and insecurity, an atypical conservative trait.The US for a so called modern and wealthy country has poor industrial relation practices with little protection for the worker, so maybe unionisation will advance the US to a genuine modern nation that looks after its workers well being, standard of living, health and education.Determining pay is measured using skill level, training level and risk associated with the job. So, you can have a low skilled job with high risk and receive a good pay, or have a job with lots of training and the pay is so-so.Another issue is viability of a business. If you have a hot dog stall and want $5 a dog and people only want to pay $4 you will go broke. This is why imported vehicles are important so people can buy more affordable appliances to drive to and from work.Setting up a union is easier than setting up work conditions and pay.
  • El scotto I can get the speedometer from dad's 72 Ford truck back. I can't get dad back.
  • El scotto BAH! No dividers in the trunk for bags of onions or hooks for hanging sardines! Hard Pass.