BYD Enters New Battlefield, Wang Chuanfu Faces Two Major Challenges

In September just passed, BYD stood on the sales champion podium again.

However, behind the crown's glory, the comparison of data is striking: domestic sales dropped nearly 13%, overseas sales surged over 153%. BYD's growth engine, from the fierce red ocean competition domestically, shifted to the high-risk blue ocean market overseas.

Wang Chuanfu steers BYD towards the deep blue, but ahead waiting for him are two major challenges that must be overcome.

1. BYD Enters a New Battlefield

In September just passed, BYD sales remained very hot.

Sales and production bulletin shows, in this year September BYD new energy vehicles sold 463,600 units, compared to 396,300 units of the same period last year, a year-on-year surge of 16.99%.

Such dazzling achievements keep BYD far ahead in the industry. At the same time, SAIC Group 406,000 units, nearly 60,000 units less than BYD.

Also Chery 292,300 units, Geely 292,200 units, Changan 228,900 units, Great Wall 114,900 units, all are far from BYD.

It is worth noting that, among BYD's 463,600 units total sales, domestic sales 282,900 units, year-on-year decline 12.97%; overseas sales 180,700 units, year-on-year surge 153.59%.

CPCA data shows, domestic car market September sales year-on-year decline about 25%.

Although BYD domestic sales ran ahead of the general market, the strong contrast of their domestic and overseas sales rise and fall also indicates, when domestic price war sees no end, and plug-in hybrid bonus accelerates to vanish, overseas is no longer a "side plot" to add icing on the cake, but a "main quest" concerning future survival.

Sales growth focus shifts outward, BYD enters a new battlefield.

2. From Making Cars to Making Ships

Leading BYD into this new overseas battlefield, Wang Chuanfu faces two challenges. The first challenge, ships are not enough. Who would have thought, BYD's biggest bottleneck going overseas currently is not cars but ships.

BYD is very hot overseas, if not for transport capacity limits, sales could be increased significantly. To some extent, this is a sweet burden.

As early as 2022, Wang Chuanfu invested 5 billion yuan to order Ro-Ro ships, building a proprietary fleet. January 2024, the first "Pioneer 1" made first voyage to Europe.

Since then, Changzhou, Hefei, Shenzhen, Xi'an, Changsha, Zhengzhou, Jinan ships joined sequentially. A total of 8 ships, annual capacity over 1 million units.

But for today's BYD, such capacity is already far from enough.

This year BYD car export target, jumped from 1.5 million units to 2 million units, next year is as high as 2.5 million units. Existing capacity is like a small boat crossing a river, hard to carry massive volume.

So BYD added again, ordered 10 more Ro-Ro ships, 2027 to 2029 batch delivery.

At that time, BYD's own car transport fleet will expand to 18 ships, annual transport capacity from current 1 million level, jump to 2.5 million level. Export sales constrained by capacity limits, BYD must win this "capacity battle".

3. The Road to Globalization is Still Long

Transport ships transport cars manufactured domestically to overseas markets, building factories abroad means directly making cars locally and selling directly.

With Chinese cars becoming more and more powerful, causing certain impact on car markets in multiple overseas countries, they started requiring Chinese car companies to build factories locally, make cars locally and sell locally, keeping jobs, taxes, etc., also locally.

BYD and other Chinese car companies, while transporting Chinese cars out overseas, also need to invest heavily in building factories overseas.

Toyota with annual sales exceeding 10 million units, why becoming the world's largest car company, mainly rooted in it having factories, suppliers, dealers, financial services and after-sales networks everywhere in the world.

Including Europe, Japan, India and other multiple major car markets, currently all have obvious entry barriers for Chinese cars.

They mainly target vehicles entering local markets from China in export form, surrounding and intercepting Chinese cars through tariffs and other measures.

Japanese car companies like Toyota, when going global back then, also encountered such entry barriers. In the 20th century Japanese cars entered the US at the beginning, also encountered huge political resistance.

So Toyota no longer stuck to the old path of "Made in Japan, Sold Globally", but spread production lines overseas, completing manufacturing and sales locally.

BYD currently also walks this path, accelerating overseas factory investment and construction, such as Thailand and Indonesia factories in Southeast Asia, Hungary factory in Europe, Brazil factory in the Americas, etc.

This is letting BYD take root locally, from "Chinese export car company" changing to "Local car manufacturer". Of course, investing and building car factories is just the first step.

Whether R&D management can integrate, whether after-sales can keep up, whether products can adapt to regulations, unions and consumption habits... BYD has many more things to do.

From "BYD of China" to "World BYD", BYD's globalization speed is fast, but compared to giants like Toyota, there is still a long road to go.