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China’s BYD Ready to Launch into U.S. Market – Really.

Long-delayed debut could come in 2015, maker insists.

by on Jan.07, 2014

One of BYD's latest models, the F3R.

A New Year and an old promise.  Once again, China’s BYD says it is ready to finally enter the U.S. market.  It’s the same thing the maker has been claiming since showing off its products at the North American International Auto Show in 2010. But while the company will be notably absent from the Detroit show this year, a senior executive claims it is finally ready to make the jump across the Pacific.

The Chinese maker, which has the backing of U.S. mega-investor Warren Buffett’s Berkshire Hathaway, plans to introduce four models into the U.S. by the end of 2015, according to Stella Li, who oversees operations in the States.

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But don’t expect the maker to simply come in and undercut the competition, notably “value-priced” brands like Hyundai and Kia, she told the Bloomberg News Service.

“BYD has become more fashionable and we have improved our design and safety. We don’t want to compete on price anymore, but on quality and innovation,” Li said, during an interview of Shenzhen, China.

BYD is one of a handful of Chinese makers – a list that also includes Chery, Geely and Great Wall – that have been eyeing the lucrative American market.  A number of them have gone so far as to display products in Detroit and at other U.S. auto shows over the last half-decade, but deadlines have repeatedly come and gone without any Chinese maker actually opening up shop.

BYD has perhaps come closest.  It set up an American headquarters several years ago in a 93-year-old refurbished building in the resurgent Figueroa District in downtown Los Angeles. And it has shipped some of its buses to the American market.  But so far, its cars have failed to reach any of the showrooms that BYD had begun to line up.

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There are a number of reasons behind the delay.  BYD has had a number of problems back at home, including a sharp, unexpected shortfall in home market sales for several years. The maker also ran afoul of the Beijing government which confiscated several buildings it claimed were built illegally.  The maker also had problems, according to various industry sources, meeting tough American motor vehicle standards, a problem compounded by what Li admitted was a lack of brand, history and “no competitive advantage.”

Complicating matters, BYD intended to focus on battery-based vehicles such as the e6, a modest-sized battery sedan, and the F3DM plug-in hybrid it displayed at the Detroit Auto Show in January 2011 –promising to put them on sale in the U.S. by the first-quarter of 2012.

At the time, though, company officials sounded a note of caution. “BYD’s not in a rush to come to the U.S,” stressed Michael Austin, president of BYD America, in a 2011 auto show interview with TheDetroitBureau.com.  Before it gets here, he insists, “We want to get it right.”

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One reason BYD may finally be ready is that it has completed billionaire founder and Chairman Wang Chuanfu’s three-year reorganization forced by the maker’s economic problems. That has generated positive feedback among investors, including Buffett, whose investment arm purchased a 9.9% stake in BYD in 2009. The maker’s stock, traded in Hong Kong, gained 63% last year – even though earnings collapsed due to not only a decline in auto sales but a dip in BYD’s battery sales and major losses on its photovoltaic business.

(The company, whose name is short for Build Your Dreams, was originally founded to produce batteries for consumer electronics goods and remains one of the world’s biggest suppliers.)

(Chinese regulators limit car sales in more major cities in bid to reduce smog problems. Click Herefor more.)

Despite growing pressure from the Beijing government aimed at shifting automakers from gas-power to battery-electric vehicles, BYD continues to struggle in its home market to build demand. That is forcing the maker to put even more emphasis on the U.S. and other foreign markets. But Senior Vice President Li said she is confident the coming year will see a big improvement in BYD’s fortunes.

“2014 will be the year,” she promised, “we start to harvest the fruits of our labor.”

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2 Responses to “China’s BYD Ready to Launch into U.S. Market – Really.”

  1. dwight mannsburden says:

    who’ll be here first, BYD or Alfa?

    Frankly I’m not very confident of either of them.

    All the Chinese vehicles that have been at NAIAS over the last few years have been miles away from being ready for the US market (doesn’t look like any of them are bothering this year, though). Alfa has been delayed so long it’s close to a joke.

    • Paul A. Eisenstein says:

      I recall one Chinese vehicle that was on display in the entry hall was so badly built even its namebadge dropped.

      Paul E.