Since the IAA 2023 in Munich at the latest, there has hardly been a topic that has made traditional German manufacturers sit up and take notice more. The abbreviation BYD for Build your Dreams from the Chinese car manufacturer has become more than just a vision and is pushing into the German automobile market with competitive prices. The founders of the company had a clear idea of how to reduce global warming in 1995 and started producing Batteries. These experiences in battery construction from the first few years are now paying off in the long term.
It wasn't until 8 years later in 2003 that BYD joined the struggling state-owned automobile manufacturer Xian Qinhuan Automobile. In the regulated Chinese market, the initial aim was to acquire a license to manufacture automobiles. And the first few years proved to be extremely tough; the Flyer model soon had to be discontinued.
Afterwards, all internationally successful car brands such as Toyota were studied in detail in the research and development departments. The competition's cars were completely dismantled into all components and all patented components were carefully replaced with tailor-made in-house developments and integrated into their own models. Using this approach, over 2007 patents were registered in 2.000.
In the initial phase, the new models that emerged were similar to the technical models Toyota Corolla and Toyota Previa. Another advantage was the in-house production of the most important components such as engines, transmissions, control and braking systems and all vehicle electronics. This meant that the company was largely self-sufficient and continuous in vehicle production compared to important competitors.
Another milestone in the company's young history was the acquisition of the Japanese company Ogihara Corporation, a factory for the production of original vehicle part molds. The expansion of the research and development departments was constantly pushed forward. The first hybrid vehicles were developed and sold with this know-how.
|year ( YYYY )||2019||2020||2021||2022|
|Car sales in units||202.452||387.957||713.437||1.796.625|
Punitive tariffs in Europe?
In the following years, BYD developed into the country's most important manufacturer of electric cars and has now completely said goodbye to the internal combustion engine. BYD already replaced Volkswagen as market leader on the Chinese market this year. A dynamic development that is not yet complete.
The IAA specifically targeted the European market and presented attractive new electric cars at lucrative prices. This development is now even bringing the European Union into action. The subsidized Chinese auto industry is now under scrutiny. The aim is to investigate the competition-distorting Chinese subsidy for the auto industry. Ultimately, a punitive tariff could be introduced on imports of Chinese cars. But this also threatens a new trade war.
Pressure on German manufacturers
The pressure from competition on German manufacturers has increased enormously since the start of Tesla's gigafactory. There is now a risk of further loss of market share in Europe due to BYD's massive entry. The first effects are already being felt, with the massive price reduction of the new BMW X1 already having an impact. The price war for all manufacturers is likely to intensify once the environmental bonus expires.
With the strong growth of the vehicle market for zero-emission vehicles, electric cars that require little maintenance are in greater demand. Traditional values such as a broad dealer network with very good workshop performance will probably be less in demand in the future in the context of electromobility. With the new generations of drivers, the use of the car is much more important than the ownership of the vehicle. If the traditional German manufacturers want to assert themselves, the focus must be on the rapid transformation into service providers for the use of the vehicles.
Cover image – Copyright olly – stock.adobe.com
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