Chinese electric carmaker BYD Co Ltd. is being hailed as perhaps one of the best success stories from the nation’s reform and opening-up in the last 40 years.
The Shenzhen-based company has been the global leader in new energy vehicle sales for the past three years and has maintained that record during the first six months of this year.
In the 23 years since its inception in 1995, BYD has transformed from a battery maker with just 20 employees into a global company with 220,000 employees and more than 30 industrial parks on six continents.
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Employees work on a BYD assembly line in Shenzhen, Guangdong province. Reuters |
“Without reform and opening-up, there would be no BYD,” says Wang Chuanfu, the founder, chairman and president of BYD. “The reforms have helped usher in a market-oriented economy.”
Wang says the dream of a market-oriented economy was what led him to set up BYD 23 years ago. In the early 1990s, demand for rechargeable batteries was surging, led by the growing popularity of mobile phones. But at that time there were no major battery producers with independent intellectual property rights for the technology in China.
Undeterred, Wang decided to start off as a battery supplier for leading mobile phone producers and gradually won the trust of international brands like Nokia and Motorola.
He recalls that although orders nearly doubled every year, BYD did not have much collateral to take out a loan for factory expansion. It was the local government that stepped in to rescue Wang at that time with a guarantee that enabled BYD to secure funding. In less than a decade, the company had become one of the largest battery suppliers in the world.
“All kinds of professionals and organizations can compete in an impartial environment thanks to China’s reform and opening-up policies. It has given us the inspiration to innovate and unlock the full market potential,” he adds.
Wang says the company attaches great importance to technology and innovation, which is reflected in the headcount of 20,000 employees performing research and development operations. The company has filed for 22,000 patent applications globally, 14,000 of which were approved by the end of 2017.
Like many emerging private companies at the time in Shenzhen, such as Huawei, BYD decided to change tack from being an original equipment manufacturer to a company with its own brand, albeit in another emerging industry.
In 2003, it entered the automobile industry with the acquisition of Xi’an Tsinchuan Auto Co Ltd and surprised the market with the world’s first plug-in hybrid automobile in 2008. Since then, the Chinese e-vehicle brand has gained recognition in the global arena. BYD Auto has a wide range of small and medium-sized cars, including small compacts, people carriers, and small sedans. Hybrid electric vehicles and all-electric models are also among its products.
One of the biggest changes to the automobile industry in China in the last 40 years has been the growth of domestic brands, says Wang.
When asked about the experience of going global as a Chinese private company, he says the key is to rely on innovation, rather than on low prices, to tap the international market.
“The differentiation of products propels us to expand,” he adds. Citing the UK market as an example, Wang says BYD realized it was impossible to compete with British companies head on and decided to offer electric vehicles instead. “We are not competing with them, but looking to complement,” he says.
In 2015, BYD presented the world’s first electric, zero-emission double-decker bus in London. Today its buses now account for 80 percent of the London market, 50 percent of electric buses in the United Kingdom and 80 percent of electric buses in the United States.
After having successfully entered the European and US markets, the automaker is now looking to further expand its global presence. Nearly 35,000 electric buses have been delivered to its global partners and the company has maintained its international sales volume in electric buses from 2014 to 2017.
Besides electric buses, BYD has expanded its product line to environmentally friendly electric trucks and forklifts. The company has also been involved in exporting industry standards to the Philippines, Morocco, and other countries.
BYD announced in September that the company will be the first in the industry to open source technology related to sensors and controls for its vehicles so that international app developers have access to data and can jointly create an online driving ecosystem, like the operating system of a mobile phone.
Meanwhile, the company has continued its internal reforms by allowing some departments to purchase components outside the company and to supply for other brands.
“Of course, the reform has brought extra pressure, but pressure is a good thing, which inspires innovation and stimulates vitality,” Wang says.
(China Daily European Weekly 11/23/2018 page27)