Background: This is how BYD wants to conquer Europe: We don’t want to be the cheapest, but we want to be the best

2023-07-28 06:15:44

Background: This is how BYD wants to conquer Europe. We don’t want to be the cheapest, but we want to be the best

The three millionth BYD car rolls off the assembly line

© press-inform – the press office

The Chinese carmaker BYD has meticulously planned the tiger leap to Europe and is bringing six cars with it to gain a substantial foothold. But the ambitions of the Chinese don’t end there, they want to be among the top five most successful automobile manufacturers in Europe. for now.

The statement leaves little room for doubt. “I want to be in the top five in Europe,” says Brian Yang, BYD’s Vice President Europe. The smart Chinese with the friendly smile and the neatly parted hair also knows that time is of the essence. “The window to be successful is still two years open.” In plain language. BYD needs to deliver now and in the near future. That’s why the bridgehead doesn’t consist of one car, followed by more cars, but of several. By the end of the year or early next year, BYD will be bringing six cars to Europe: including the Han, a sedan in the E segment, the crossover brother Tang, of which a revised version that can charge in three phases is on display at the IAA in Munich NCAP test should achieve five stars and has more driving assistants on board.

We don’t want to be the cheapest, but we want to be the best

It is clear to the BYD strategists that the E-brothers will not be box-office hits. Then the compact e-crossover Atto 3, which is supposed to compete with the VW ID.4. The purchase arguments are the well-known: a lot of technology and car for the money. The next arrow is already in the quiver: The BYD Seagull. A promising electric SUV, including the BYD Dolphin, a hatchback that shares technology with the Atto 3. Even if the managers remain silent, it is as certain as the Amen in church that this Stromer will come to Europe. At the auto show in Shanghai, the small car was already there. The price of around 10,400 euros should scare the other car manufacturers. “We want to be represented in every segment,” explains Brian Yang.

However, the tempting Chinese prices will not be maintained due to the homologation and the technical specifications in Europe and especially in Germany. But even if the price goes up by six or seven thousand euros, the car is still a tough challenge to the VW Group’s ID.2 derivatives, and the Korean manufacturers will also have to brutally stretch themselves. In short: a brutal price war is looming, in which the European manufacturers and above all VW are fighting with blunt weapons due to the large number of employees and the associated high wage costs and ultimately have their backs to the wall. A car that would also cause joy in Europe is the Land Rover Defender opponent U8, which is due to appear later this year. But the speed fraction will also be served with the Hypercar U9, which will be rolling onto the stage next year at the latest.

“We have been preparing for this moment for 20 years,” says brand manager Yunfei Li with a soft voice and a friendly smile. But in the ears of German managers, these words sound like a threat. The normative power of the factual underscores that this statement is not insubstantial saber-rattling. The Chinese carmaker’s corporate economy is put on attack mode. That means BYD invests more in development than it makes in profit: last year net income was $2.4 billion, while $2.9 billion went into research.

Here, too, the Chinese are not acting according to the watering can principle, but have concentrated their investments in three important areas. The motor control including the software, the electric motors and of course the battery itself. So BYD issues a change to the future. Not entirely without risk, as the automaker’s strategists expect the home market to be very competitive over the next few years. But the steel bath in China makes BYD fit for competition in Europe. “In addition to very competitive products, the manufacturer BYD obviously has an efficient cost structure and strong vertical integration – i.e. in-house cell production. BYD is also prepared for the coming years in Europe. The planned factory in Europe is seen as the next step in the expansion,” explains Peter Fintl, automotive expert at the Capgemini management consultancy.

The numbers support the expert’s view. Last year, BYD sold 1.86 million electrified vehicles, up 208.6 percent. The upward trend continues. In the first half of this year there are already more than 1.25 million units, which corresponds to an increase of 95.78 percent compared to the same period last year. Outside of China, there were 74,300 vehicles, more than 2022 in total. “And the second half of the year will be even better,” says Yunfei Li happily. “We don’t want to be the cheapest, but we want to be the best. In terms of technology, safety, design and, above all, service. That’s why we look for the best partners in each country,” Li continues. It starts with your own product and ends with the important after-sales business. The Chinese car manufacturer relies on the classic dealer structure and not just on online direct sales. According to BYD, you need at least 100 dealers to be successful in Germany, currently there are only 13. However, the Asians are surprised at how slowly the wheels of bureaucracy grind in this country. If you renovate an existing car dealership in China, it takes three months and the sales location is ready for use. For new buildings it is six months. In Germany, the renovation takes nine to twelve months and the new building, according to BYD, two years.

Anyone who sees the huge corporate headquarters in Shenzen knows that the manager means every word he says. Around 60,000 engineers work at BYD. There will be even more in the next few years as the Chinese automaker moves to an even larger headquarters. The technicians earn an average of around 800,000 RMB net (99,000 euros) a year, live in huge silos in one-room apartments that cost 40 euros a month and can be at their workplace in just a few minutes on the autonomous monorail. These conditions do not detract from productivity. On the contrary, the Chinese carmaker has filed around 40,000 patents, of which 28,000 have been approved. The direction is clear: technology-based and innovation-oriented is emblazoned in large letters on the wall of the group headquarters. Ambitious words. At least one seems to believe in BYD’s success. Super investor and multi-billionaire Warren Buffett owns ten percent of BYD.

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