Welcome to the WeChat subscription account of “Sina Technology”: techsina
Text/Yu Bin
Source: Internet analyst Yu Bin (ID: fenxishiyubin)
Looking around the domestic new energy vehicle track, the most popular is BYD. At the beginning of April this year, BYD once attracted attention for discontinuing the production of fuel vehicles, and even swiped the screen in the automotive circle. What followed was that sales of BYD’s all-in new energy vehicles increased significantly, and sales in the first three quarters of this year even surpassed Tesla, becoming the world’s top seller.
However, while shipments have increased significantly, BYD under the spotlight has also fallen into a crisis of brand trust. Since October, car fans who know Chedi, Weibo and other platforms have begun to report that BYD Dolphin car air conditioners have dusting defects. Afterwards, the incident continued to ferment, and it was not until mid-November that BYD issued a statement acknowledging that the air conditioner dusting incident was true. At this time, the public opinion had lasted for more than a month.
Not responding in a timely manner, and declaring that “the main component of the powder is aluminum hydroxide (commonly used in gastric medicine), which is harmless to the body.” Many netizens do not buy it. Some netizens even said: BYD’s sales volume has increased, so it started to drift?
In fact, BYD’s past public relations crises have occurred from time to time, and most of them are related to the quality of its automobile products. Obviously, what this exposes is not just a simple word game played by the public relations department, but perhaps the disaster caused by Yadi’s brand power and product power.
01
Founded in OEM manufacturing, brand power and product power are still weak
Although BYD’s sales are bright, it is destined to miss the high-end. The advantage of BYD is that since its establishment, its business direction has been centered on new energy, covering multiple key sectors such as batteries, trams, and energy storage.
However, BYD is similar to Tesla, an overseas new energy car giant, and even its entry into the car track is magically consistent with Tesla, both in 2003.
The difference is that BYD started out relying on OEM manufacturing in its early years, and even had a certain competitive relationship with Foxconn, the king of OEM manufacturing. Moreover, it is involved in many subdivided fields, not only passenger cars, but also buses, commercial vehicles, and even special engineering vehicles.
Tesla, on the other hand, is primarily focused on passenger vehicles. Looking back at the development history of BYD, Wang Chuanfu can be called a visionary, even a veritable strategist. However, its far-sighted strategic vision “dropped the chain” in terms of tactics.
Because of its large and comprehensive positioning, BYD’s original leading edge was also quickly overtaken by Tesla and new domestic car manufacturers. It was not until the third quarter of this year that it regained the global sales champion. Because of its size and completeness, many of BYD’s products are also accused of being shoddy, and the quality cannot stand the test of the market.
For example, earlier, an incident in which a BYD car ran wildly and caused 1 death and 5 injuries attracted media attention. At that time, according to the owner of the car, the tragedy happened because the BYD suddenly couldn’t stop the car, and he used a long Weibo on Weibo to describe the incident in detail.
Although there was a video showing that the speed of the car was at least over 100, some netizens questioned that the accident was caused by the car owner stepping on the accelerator vigorously. However, she questioned BYD why the brakes failed when starting, the active braking function also failed at the same time, and the main driver’s airbag failed to deploy after the collision, etc.
It can be seen that this is not a simple accident caused by brake failure and the owner’s operation error.
Putting BYD on the cusp, there are also various news about its blade batteries frequently catching fire and spontaneous combustion. According to statistics from netizens, in the first half of 2022 alone, there were a total of 18 BYD spontaneous combustion incidents (including “suspected” cases), involving models including, Qin PLUS, Qin Pro, Song Pro, Tang 3, Tang DM-i 9 and other models. It is worth noting that all self-ignition models are equipped with “lithium iron phosphate batteries”.
While the product quality is not reliable, BYD’s public relations crises have also continued one after another. Coupled with its initial positioning, it has always been labeled with low price and cost performance, so in the public’s impression, BYD has nothing to do with high-end cars.
Even considering its practicality, its frequent security incidents have made some users have to think twice, or even hesitate.
It can be seen that although BYD has won by relying on volume in recent years, it has also launched its brand and won the top sales again, but its brand power and product power still exist.
02
Both volume and price rise, investors and consumers may become leeks
Looking at BYD from the perspective of capital, there are not small differences between domestic and foreign investment institutions. On the one hand, there are a large number of domestic fund players with heavy positions. On the other hand, foreign capital has frequently reduced their holdings and cashed out. Does this mean that ordinary investors have not seen the truth behind it?
For example, this year’s data from the Hong Kong Stock Exchange disclosed that Buffett, the “stock god”, has repeatedly reduced his holdings of BYD shares, and his Berkshire Hathaway has further reduced its holdings of BYD’s H shares. You know, this is the fifth time that stock gods have reduced their holdings of BYD this year, with a cash amount of more than 10 billion.
In addition, according to the latest news from the Hong Kong Stock Exchange, BlackRock, the world’s largest asset management institution, has continuously reduced its holdings of BYD’s H shares, with a total reduction of about 3.9 million shares, and its shareholding ratio has dropped from 6.21% to 5.85%.
Behind the reduction of Buffett and international capital, there are naturally considerations. In addition to the fact that the existing production capacity cannot meet the strong market demand, BYD further expands its business territory and does not focus on the car manufacturing business, which is the biggest concern of this type of investors.
For example, affected by the epidemic in recent years, insufficient shipping capacity has also become a major obstacle to global trade, and BYD has also seen a huge market. According to reports, BYD, which has just emerged in the auto market, has begun to “shipbuilding” again.
It is reported that its affiliated company will order as many as 8 ro-ro ships that can carry 7,700 vehicles at a shipyard in Yantai, Shandong. At present, it is basically confirmed that 6 ships will be built, and the other 2 ships are options orders. The total cost is close to 50. billion.
Obviously, capital will increase BYD’s profitable business, but it will not pay for its unpredictable risks. What is worrisome is that while international capital has retreated one after another, domestic investors have continued to increase their positions in response to BYD’s strong sales.
When the tide goes out, you don’t know who’s swimming naked. BYD, which lacks brand power and product power, is still running wildly on the road of “big and comprehensive”, which is frightening.
You must know that BYD’s rapid rise in the early years was due to my country’s new energy vehicle policy subsidies. However, this purchase subsidy will end on December 31, 2022. Therefore, it also brought BYD’s successive price increases.
For example, following the multiple price increases in January and March that caused dissatisfaction among some of BYD’s new customers, at the end of November, BYD announced again: “The official guide prices of new energy models related to Dynasty, Ocean and Tengza will be adjusted. Adjustment, the increase ranges from 2,000 yuan to 6,000 yuan, and the price adjustment notice for specific models will be released separately. Customers who paid a deposit before January 1, 2023 will not be affected by this price adjustment.”
The reason for the price increase is that in addition to the expiration of the subsidy policy, the price of battery raw materials has risen sharply, which is also one of the important reasons. However, its price increase cycle is getting shorter and shorter, and it has also ushered in a lot of doubts.
According to statistics, while other brands make small profits but sell more cars, the more BYD sells, the higher the price. For example, the international giant Tesla went in the opposite direction, announcing a price reduction of 14,000 to 37,000 yuan for the domestic Model 3 and Model Y at almost the same time.
And BYD took one year from “1 million to 2 million”, and only half a year from “2 million to 3 million”. After BYD became the first Chinese brand to achieve 3 million new energy vehicles off the assembly line, it was also the time for it to raise prices again.
As a result, BYD has also often been caught in the policy dividend fading, and began to harvest doubts from investors and consumers. It is still unknown whether it can maintain the current sales trend after the policy subsidy bonus disappears and prices continue to rise.
03
It is difficult to retain talents, why BYD wins?
In today’s global new energy vehicle market, Tesla and BYD are rivals. But whether it is the founders of the two companies, brand positioning, or corporate management, they all have very different styles, even worlds apart. The former is high-profile and unassuming, with a distinctive personality and a deep understanding of marketing. The latter is low-key and pragmatic, with a unique vision, but because the strategy is not focused enough and the style of play is too conservative, it misses many opportunities.
According to observations, BYD, which has been working on the new energy track for a long time, has more industrial chain resources and a broader business perspective than Tesla, which specializes in new energy vehicles. However, its executive team construction, employment and retention strategies , but it is its flaw.
In fact, regarding BYD’s handling of several public relations crises, some people questioned BYD’s brand and the strength of its public relations team. As a big global brand, whether it is the professionalism of team management or the ability to build brand influence by relying on brand and public relations, it is questionable.
According to media interviews with BYD’s former employees, they said that BYD has internal problems such as low salary, non-standard and transparent management, excessive nepotism, and extremely limited room for promotion.
What is still fresh in my memory is that affected by the epidemic in 2020, employees raised banners to defend their rights, and group incidents broke out, which even made BYD a little at a loss.
In the impression of dealers, BYD’s products and network planning are chaotic and lack of system, so they are also complained about. Although BYD has adjusted its organizational structure many times and released harsh words to punish corruption and change the reality of chaotic company management, the frequent loss of high-level talents and the instability of grassroots employees are objective.
Previously, there were many articles on the Internet commenting on Qi Xia Zhibing, Hou Yan, Shu Youxing, Zhao Changjiang, Li Yunfei, Gao Zikai and other executives. According to statistics, many of these executives are veterans who have joined BYD since graduating from university and worked hard with Wang Chuanfu for more than ten years. Some of them are even “senior” alumni.
Although each has its own strengths, “relying on the old and selling the old”, and even internal competition for power and profit, and internal friction have become obstacles to BYD’s development. As it grows and grows, its disadvantages gradually emerge.
04
epilogue
Starting from a battery factory and a processing factory, it has now become a new energy vehicle brand with great influence in the world. The development history of BYD is a history of Wang Chuanfu leading his entrepreneurial team to continuously reform themselves and expand their business territory. It looks for a track and continues to dig deep vertically, and through the foresight and foresight to subsidize the era of new energy policy dividends, it is worth learning for entrepreneurs.
However, the stalls are too large and the business is not focused enough, but it is BYD’s positioning. Therefore, so far, in addition to the huge sales advantages brought by its mid-to-low-end models, it is still difficult for it to compete with other powerful players on the same track in terms of product power and brand power. This is obviously an uncertain factor for BYD’s future, and it is also an existential crisis that BYD cannot bear to see.
From this point of view, it seems that BYD Auto has temporarily won the honor of the world’s first sales volume, and it does not seem to be a surprise, and BYD still has a long way to go if it wants to maintain its position in the industry.
(Disclaimer: This article only represents the author’s point of view, not the position of Sina.com.)
This article is reproduced from: https://finance.sina.com.cn/tech/csj/2022-12-06/doc-imqqsmrp8722509.shtml
This site is only for collection, and the copyright belongs to the original author.