The Chinese automaker, now struggling after successfully transforming from a phone battery producer into a carmaker, is ready to bid all on the recently unveiled Denza electric car.
The Shenzhen-based company, also famous thanks to an investment from Warren Buffett’s trust fund, was previously weary of any joint venture with foreign multinational car companies. The maker was on a transformative process: jumping from mobile phone handset and component OEM to a fully-fledged carmaker. But, while the first business has grown by more than 20% during that period, the core car segment is heading for disaster. While still accounting for around half the Rmb 25.2 billion ($4.1bn) brought in by sales during the first six months, car deliveries collapsed 27% – as all the domestic automakers are loosing market share to the big foreign brands.
“We believe this is the right product at the right time,” says Wang Chuanfu, BYD chairman, talking about the Denza. “The government’s new policies are eliminating obstacles to the development of electric vehicles.”
Although traditional gas and diesel-powered cars make up the bulk of BYD’s sales, the company is convinced the electric car market will soon gain traction. The main reason is the incentive driven strategy of the Chinese government, which is mulling for a higher acceptance of the so-called new-energy vehicles: electrics, plug-in hybrids and fuel cells.
Via Financial Times