Business Internationalization: BYD’s new energy vehicle case

Business internationalization is one of the growth strategies that a firm whose objective is to increase its sales, income, and profitability levels can adopt when it operates in mature local markets and has the financial muscle and technological resources to undertake expansion.

It is an organizational process aimed at generating optimal conditions not only to export products and/or services but also to operate efficiently in different parts of the world geography, in the search to conquer markets, generate economies of scale, adapt to the growing international competition and diversifying risk, among other reasons. Business internationalization is, if you will, a fundamental component, and a consequence, of the broad economic and market globalization that has occurred in recent decades.

This document analyzes the internationalization process of the Chinese company BYD, particularly its new energy automobile division, which characterizes its international operation and its marketing strategy, a case study that can serve as an example for Latin American firms.

Summary

In recent decades, the globalization of the automotive industry has become increasingly evident. Making full use of domestic and international markets to continuously promote the export of this industry in China has become the only way to expand its industry through independent brands. Also, the transportation sector’s oil consumption has grown at a faster rate than any other sector. Transportation accounts for a quarter of greenhouse gas emissions.

To solve these problems, in the automobile industry, optimizing the energy structure and reducing the dependence on non-renewable resources such as oil is the development direction of the contemporary automotive industry. In this context, it is an opportunity for China’s auto industry to improve its international competitiveness and an important opportunity to enter high-end manufacturing.

BYD, once the world’s second-largest maker of rechargeable batteries, has entered the auto production and sales industry with its advantages in battery production. Because it has mastered the core technology of electric batteries, this is the most important link for new energy vehicles.

And with the conditions ripe for mass production, this has laid the foundation for the technology reserve of BYD’s new energy vehicle internationalization process, and has also made BYD a leader in the global new energy field and in a leader in the global rechargeable battery industry. Since its establishment, BYD Auto has always adhered to the concept of developing its own brand as a guide, aiming at “building a world-class national automobile brand” and revitalizing the independent auto industry as its own responsibility.

It is constantly in the way of international operations in a unique way. The Group adheres to the development philosophy of “technology, quality and responsibility”, assumes the corporate social responsibility of ecological and environmental protection, and creates a long-term sustainable core competitive advantage in the new energy automobile industry.

This article uses BYD’s new energy vehicles as a case study to present the international development status and development experience of BYD’s new energy vehicles. Second, BYD’s new energy vehicle internationalization strategy is presented from the international market entry mode, motivation, and brand positioning.

Chinese enterprises under the conditions of global economic integration and an open economy face the situation of “internationalization of the market and internationalization of domestic competition”. To integrate into the market and also to revitalize the domestic industry, BYD proposed the path of going towards international business management.

BYD’s business strategy is based on the core objective of creating an international brand. When the brand has a certain reputation and credibility, a global brand strategy is proposed.

After using the empirical analysis method to refine and summarize the successful experiences and lessons learned from BYD’s internationalization strategy, it presents suggestions for Chinese companies to formulate a suitable internationalization strategy.

Introduction

Since the 21st century, the explosive growth of China’s auto production and sales has become a powerful driving force for the continuous development of China’s auto industry. In 2009, China overtook Japan, with both automobile production and sales volume winning the global automobile market for the first time. However, behind the number one car production and sales volume, most of the Chinese passenger car market has long been occupied by foreign car brands. The space for the development of China’s independent auto brands is steadily shrinking. Struggling to survive in the market. With the continuous development of China’s independent automobile brands, Competition in the Chinese auto market has become increasingly fierce. China’s independent auto brands have also begun to continuously try to enter the international market. Companies like BYD and Geely are prominent representatives.

With the acceleration of global integration, market globalization has become an inevitable choice for many companies. The role of global industries, including the auto industry, in the international division of labor is becoming increasingly important. Multinational corporations have become an important strategy for most companies to develop an invincible position in the long term. As a developing country, China is also actively joining the huge wave of economic development. globally. This means that many Chinese companies will face more challenges from globalization. If there are challenges, there will be opportunities. The companies that want to exit are the first to bear the brunt. Its development model and strategy to enter the global market are worthy of reference and analysis. It is a model for the success of Chinese domestic enterprises.

BYD has always implemented internationalization as a core strategy for the development of the company. Since 300 vehicles were exported to the international market for the first time in 2003, BYD Auto has paved its way to foreign markets. From 2003 to 2020, in just over ten years, it opened up the unprecedented automotive market in Europe, America, Japan, and South Korea, and has been recognized by major international countries. Regardless of export sales volume or growth rate, BYD’s new energy vehicles are among the best of China’s independent auto brands. Therefore, analyzing the internationalization of BYD’s new energy vehicles can provide references for other Chinese auto companies.

Aim

Analyze the characteristics of the BYD company in its experience with the internationalization process of its new energy vehicles.

Chapter 1. The theoretical framework of business internationalization

According to different considerations, academics classified the research related to the internationalization of companies into different categories, and Anderson’s classification is a typical representative among them.

Anderson (2000) divided international management theory research into two types: economic and process [1].

Research on the internationalization of the economy is based on conventional economics, assuming that company managers are rational economic people and, based on the market information they dominate, make the most powerful decisions in the internationalization of companies.

The theory of processes is based on the theory of the organization when studying the problems in the process of business internationalization. The manager of the company has also changed from being an economic man to an actor, and he makes a more satisfactory decision under the premise of incomplete information.

1.1 Theory of economic internationalization

Hymer (1960) is a pioneer in the study of corporate foreign investment and created the famous theory of specific advantages of foreign investment. The theory is based on imperfect competition in the market. He believes that the specific advantages are necessary means for enterprises to solve the additional costs caused by foreign investment and carry out operations abroad. The reason for the specific advantages of firms is due precisely to the imperfect market.

Vernon (1966) made an analogy between a product and a person’s life and created the product life cycle theory: a product has to go through four stages, first it is the formation stage, then is the growth stage that is gradually accepted by the market, and then it is the mature stage that reaches a stable state. The last one is the four cycles of the recession phase that the market phases out. The different technological levels of the different countries will cause periodic differences in products between different countries, a difference that is the most direct manifestation of the difference in the competitive position of the same product in different markets, which drives continuous changes in international operations.

Buckley and Casson (1976) studied intermediate products in the business operation process and proposed the internalization theory. They believe that intermediate products will play an increasingly important role in the business development of enterprises, but the imperfection of the intermediate products market has led to higher transaction costs for enterprises. Therefore, companies will continue to internalize transactions of intermediate products to reduce costs. This type of internalization across national borders is the internationalization of companies.

Dunning (1988), based on the theory of internationalization and the theory of specific advantages, proposes a theory of production commitment through the introduction of location factors, which provides a theory for the choice of three international trade activities: trade of export, technology transfer and foreign investment in the internationalization of companies. support. Dunning believes that which of the three approaches a company should adopt in international operations depends on its competitiveness in terms of ownership advantages, internalization advantages, and location advantages.

Specifically:

1. The company has advantages in these three factors, which indicates that the company’s foreign direct investment activities are easy to succeed, and it is appropriate to adopt this method for international operations.
2. Companies have advantages in terms of ownership and location, but they do not have advantages in terms of internationalization. At this time, because the transaction cost of its own intermediate products is too high, it will be difficult for the company to exercise its advantages, so it is appropriate for the company to adopt technology transfer methods for international operations.
3. Companies have advantages in terms of internalization and ownership, but no location advantages, in this case, the company can only use its advantages at home, and then export to foreign markets.

1.2 Theory of the business internationalization process

Since the 1970s, the research focus of academics has gradually shifted from the drivers of the international operation of large multinational companies to the development process of small and medium-sized enterprises becoming multinational companies.

In the theory of the internationalization process, Johanson and Vahlne (1977) of Uppsala University in Sweden made important contributions. They proposed two models of international management, namely the Uppsala Model and the International Model associated with innovation. They believe that the level of market knowledge of a company determines the internationalization process of the company, so international management can be seen as a company that continuously learns market knowledge through multiple channels, gradually adjusts the psychological difference with the target market, and continuously increases international participation.

Graduation process. Bilkey and Tesar (1977) proposed a new model based on Rogers’ innovation diffusion theory, considering the business internationalization process as a series of management innovations within the firm.

According to the model, internationalization is a process by which companies learn new ideas or innovate. As a whole, internationalizing companies develop gradually along the internationalization learning curve. Since the end of the 20th century, the number of companies operating internationally in various countries has increased rapidly and the internationalization process has accelerated significantly.

Johanson and Mattson (1988) explained this phenomenon by building a network model of corporate internationalization, which viewed corporate internationalization as a process in which a company establishes and develops a network of relationships with other peers in a foreign network.

Amberger and Evers (1993) proposed a five-stage internationalization model (as shown in Table 1.2) and introduced the internationalization characteristics of these stages respectively.

Chapter 2. Overview of the international operation of BYD and its new energy vehicles

2.1 Definition of new energy vehicle

According to the “New Energy and Energy Saving Automotive Industry Development Plan (2012-2020)” issued by the General Office of the State Council of China, new energy vehicles refer to vehicles that use a new type of energy system that is different from the traditional type and depends totally or mainly on new sources of energy. It mainly includes plug-in hybrid vehicles, pure electric vehicles, hydrogen-powered vehicles, and other new energy vehicles.

BYD is one of the early entrants in the global field of new energy vehicles. Its new models of new energy vehicles include pure electric vehicles and plug-in hybrid vehicles.

2.2 Concepts Related to the business internationalization strategy

As the speed of global economic integration continues to accelerate and the process continues to deepen, the division of labor between different countries has become increasingly clear. As part of the global economy industrial chain, companies must actively participate in this process if they want to pursue long-term development.

International operation refers to the marketing of companies in the global international market to continuously expand their own business. It is the company that enters the international market from the domestic market, through the use of various methods and the establishment of various forms of reasonable allocation of domestic and foreign factors of production and participation in the division of labor of the market to carry out business activities.

Internationalization includes two aspects: the globalization of the market and the company. Among them, the internationalization of the market is mainly the globalization of enterprise products, which means that the products are no longer limited to the domestic market, but enter a broader international market.

The internationalization of a company refers to a series of commercial activities such as investment and construction of factories in foreign markets, ideas, design, and foreign trade, and it no longer simply refers to the export behavior of the company’s products.

Therefore, the international operation can be summarized as the process in which an enterprise enters the international market and then sets up product production, business management, brand building, and technology research and development on a global scale to generate economic benefits for the development of the company.

Internationalized business strategy is a series of development plans formulated by an enterprise based on its own development status and market judgment, to improve the enterprise’s core competitiveness and environmental adaptability.

The internationalization strategy of a company not only guides the development direction of the company’s international operations, but also determines the development prospects of the company’s international operations, and also plays a vital role in the survival and development long term of the company.

2.3 Development status of BYD’s new energy vehicles

In today’s world, as the development trend of the automobile industry changes, new energy vehicles have become the development direction of the automobile field of the future.

In this change, BYD is undoubtedly ahead of the times. BYD Co., Ltd. was founded in Shenzhen in 1995, initially mainly engaged in the production of electronic products and rechargeable batteries.

In 2003, BYD acquired Qinchuan Automobile Company and successfully entered the field of the automobile business. After continuous development, it has become a key high-tech enterprise integrating idea and design, production, and sales. The current core business is single-track rail systems, automobiles, and the Department of Energy.

At present, BYD Auto has 9 production bases in China, which are located in Beijing, Guangdong, Shaanxi, and Shanghai. It is also investing in foreign markets such as Europe, the United States, Japan, South Korea, and Brazil, and in other countries and regions establishing a branch.

In recent years, BYD has been at the forefront of the global new energy automotive industry thanks to advanced battery technology, strong vehicle research and development capabilities, and seamless industrial vertical integration capabilities. Until now, BYD has become a prominent representative of China’s new energy vehicles in the global auto market.

In recent years, thanks to the sharp increase in new energy vehicles, the operating income of BYD’s auto business has grown rapidly (Figure 2). As can be seen from the figure, the operating income of new energy vehicles has grown rapidly. From 2013 to 2018, it has multiplied by 32 in just four years. In 2019, due to novel coronavirus pneumonia and the contraction of China’s new energy policy, annual operating income decreased.

In 2015, it reached the same business level as traditional fuel vehicles, in 2018 it surpassed traditional fuel vehicles by a wide margin and became BYD Auto’s top revenue. In terms of sales volume, in 2019, BYD’s new energy vehicle sales were 219,353, a year-on-year increase of 42.5% compared with 2018 EV models, and brought the total cumulative production and sales of new energy vehicles to 730,000.

The rapid development of pure electric buses represented by K9 and plug-in hybrid models represented by “Yuan EV” and “Tang DM” in domestic and foreign auto markets have become important support in driving continuous revenue and profit growth. commercial.

Figure2. BYD automotive business revenue and share 2007—2011

Source: BYD Annual Financial Report

So far, BYD has successfully brought green and green public transportation solutions to Los Angeles, London, Amsterdam, Sydney, Hong Kong, Kyoto, Kuala Lumpur, and other cities. In terms of business promotion, the group has launched pure electric buses and taxis. It has been successfully operated in more than 300 cities on 6 continents, in more than 50 countries and regions. In the private car market, the group applies dual-mode technology and bi-directional inverter technology to a new generation of plug-in hybrid vehicles. In the electric hybrid passenger car market, BYD’s new energy vehicle product structure has been further improved, and its sales volume is still among the best in the world.

In the future, BYD will promote the comprehensive expansion of new energy vehicles through the 7+4 strategy, expanding the application range of new energy vehicles from private cars, buses, and taxis to sanitation vehicles, and urban commodity logistics. , passenger transport by road, and urban construction. Conventional areas such as logistics and four special areas such as storage, mines, ports, and airports will fully cover road transport with new energy vehicles. Combining strong research and development capabilities, advanced cost control capabilities, and tremendous market demand, it continues to help the global new energy vehicle industry develop faster and better.

From January to September 2020, the cumulative global sales of new energy passenger vehicles were 1.784 million, an increase of 11% over the same period last year, occupying a market share of 3.4%. With the China-US trade dispute, geopolitical risks, the impact of the novel coronavirus pneumonia epidemic, and other factors continuing to hold back global economic development, and China’s national new energy vehicle policy subsidies have fallen, BYD’s global new energy vehicle sales continue to lead the majority of auto companies.

The future development direction of the auto industry will surely be new energy vehicles. BYD is currently one of the few enterprises that can simultaneously master new energy vehicle battery technology, engine technology, electronic control technology and charging facilities, vehicle manufacturing, and other technologies and has a technology relatively mature. No matter how the industry changes, BYD will continue to maintain its strong strength in the future.

2.4 International development history of BYD new energy vehicles

As one of the fastest-growing independent auto brands in China and a leader in the global new energy vehicle industry, BYD’s automotive consumer market covers almost the entire world: traditional fuel vehicle operating markets are concentrated in Asia, Latin America, Africa, the Middle East, and in regions such as the Commonwealth of Independent States represented by Russia, the new energy vehicle market is concentrated in countries and regions such as Europe, North America, South America, China, Japan, and South Korea. In the future, BYD will continue to expand the international market based on the specific conditions of different markets.

In today’s world, the rapid development of new energy vehicles has given Chinese auto companies a good opportunity to enter the global market again. In recent years, Chinese auto companies, represented by BYD Auto, have constantly seized the opportunities brought by the rapid development of new energy vehicles to carry out a new round of globalization.

In 2011, BYD’s entry into the international market accelerated significantly. In early June, BYD Auto and Singapore’s public transport system operator SMRT signed an agreement to jointly establish a joint sales company. It plans to introduce BYD’s new energy vehicles to Singapore’s public transportation system, which has paved its way to enter the Singapore market. In the same year, BYD and the two largest bus operating companies in Santiago de Chile signed an order to provide 1,000 K9 pure electric buses and E6 pure electric taxis in the next five years.

In the European market, BYD has cooperated with many countries on related projects in the field of new energy vehicles. In early 2011, BYD successively signed new energy vehicle operation agreements with Denmark and the Netherlands; in the first half of 2012, BYD signed a contract to export E6 pure electric vehicles with London taxi company Greentomatocars. This is the first batch of BYD E6 models exported to foreign markets. In the first quarter of 2013, BYD qualified to invest in the European Union to invest in the production of new energy-related products and has also invested in building factories in Europe to produce electric buses. All these events mark BYD, which little by little is leaving the country to the world,

BYD’s North American Bus and Battery Plant landed in Lancaster, California, USA in May 2013, marking BYD’s official entry into the US market. In the United States, BYD has won large orders more than once: in 2015, it won an order of more than 2 billion yuan in Long Beach, California; In early 2016, it won an order of more than 3 billion yuan for pure electric bus from California’s Antelope Valley Transportation Bureau; Stanford, USA. The university also announced the use of BYD pure electric buses as public transportation on campus.

In 2014, BYD invested $91 million to build a plant in Brazil, another new energy vehicle-related project it has established in foreign markets. At the end of the same year, BYD Auto cooperated with CarbridgePty Ltd., Australia’s largest airport bus operating company, and introduced its flagship product, the K9 pure electric bus, at Sydney Airport as a shuttle bus.

After years of strategic implementation, BYD Auto has completed its operational layout on six continents. In 2015, BYD’s K9 pure electric buses were successfully exported to Japan. This is the first time the independent Chinese auto brand has entered the Japanese auto market in more than 30 years. It is an important milestone in the Chinese Automotive Industry.

To promote its automotive business to penetrate the European market, BYD invested USD 22.4 million to set up an electric bus factory in Hungary in October 2016, which was completed and put into operation in April 2017.

In March 2017, BYD announced that it will invest €10 million in Beauvais, France to establish an electric vehicle manufacturing plant. It is also the fourth overseas electric vehicle manufacturing plant to be built after the United States, Brazil, Hungary, and elsewhere, and in February 2018 produced the first batch of two pure electric buses. By 2017, BYD had accumulated more than 600 orders for pure electric buses in Europe and became the largest supplier of electric buses in Europe.

In April 2018, BYD’s eBus7 pure electric bus was officially put into operation in Jeju Island, South Korea. This is the largest batch of electric bus delivery in Northeast Asian countries, which means the world’s most difficult through the four major developments in Europe, the United States, Japan, and South Korea In the market, BYD has occupied market share.

In May of the same year, BYD announced that it had signed an order for 200 pure electric trucks with the Brazilian waste management company Corpus Saneamento e Obras Ltda. In December, under the testimony of Chilean President Sebastián Piñera, they delivered in Santiago 100 BYD K9 electric buses. This means that BYD is gradually exploring the Latin American market.

In 2019, BYD accelerated the development of new energy vehicles in overseas markets and achieved further development in terms of order scale and market development. In January BYD and UK bus manufacturer ADL delivered 9 pure electric buses and supporting charging equipment to operator Stagecoach South. In March, BYD landed at Brussels Zaventem Airport in Brussels, Belgium, the second largest airport in Europe, and at the same time built the largest zero-emissions fleet in Europe. In May, he successively received orders in Madrid and Badajoz, the Spanish capital. In Europe, BYD has accumulated more than 700 orders for pure electric buses, cementing its leading position in the industry.

The Latin American market has successively received orders for pure electric buses in Colombia, Argentina, and Ecuador.

Since entering the Indian market, BYD has joined local partners to successfully test and operate electric buses in Bangalore, New Delhi, Mumbai, Surat, and other cities. BYD owns 108 electric buses in India, becoming the auto brand with the most electric buses delivered locally, occupying a market share of 80% of the electric buses operating on the road in India. In June, as part of India’s 2030 electrification target, Olectra and BYD signed record orders for India’s 1,000 largest electric buses.

With the gradual recognition of new energy vehicles in the international market, BYD’s path to internationalization has become more and more clear. Compared with traditional fuel vehicles, the internationalization of its new energy vehicles is significantly faster and has changed the previous model of Chinese auto companies, directly skipping the traditional target markets of Asia, Africa, and Latin America, and mainly entering America, the European Union, Japan, South Korea, etc. The automotive market in developed countries and regions.

Although the share of new energy vehicles in the world market is still small, with the continuous transformation of the market consumption structure, new energy vehicles are expected to break the traditional pattern, continue to increase their share of the automotive market worldwide, and lead the automotive industry into a new era.

Chapter 3. BYD’s International Business Strategy for New Energy Vehicles

This chapter will analyze the mode of entering the foreign market of BYD’s new energy vehicle, the international business motivation, and the positioning strategies of different products in the internationalization process. The most direct reason for international operation is to seize foreign markets and seek a more efficient resource allocation.

3.1 BYD International New Energy Vehicle Market Entry Mode

There are three main ways for BYD’s new energy vehicles to enter the international market: export trade, strategic alliances, and direct investment in overseas factories.

3.1.1 Export trade

For new energy vehicle markets that have not established production bases, such as Japan and Australia, the export trade method is adopted. BYD firmly understood the urgent automobile needs of consumers in these countries. By establishing and improving auto sales and service networks in these countries, it seizes opportunities and adopts international export trade operations to continuously increase auto exports to foreign markets.

3.1.2 Foreign investment

One of the main ways for BYD to enter the international market during its overseas operations is to build factories abroad. In recent years, to speed up the internationalization process, BYD’s overseas factories have been significantly accelerated.

On December 11, 2012, BYD Auto’s first overseas joint venture plant officially landed in Breznik, Bulgaria, Europe. The plant is a joint venture established by BYD and energy company Bulmineral to carry out localized production of K9 buses in Europe.

This shows that BYD’s new energy vehicles enter the Bulgarian market and gradually penetrate other European countries and regions on this basis. This is an important step in BYD Auto’s international business strategy process and is of great importance for the future development of its new energy vehicles in the European automobile market.

The plant in Lancaster, USA is BYD’s first new energy project plant that BYD has independently invested in and built. The plant was inaugurated in May 2013 and its main objective is to produce pure electric buses to meet the demand for green public transport in the North American market.

At present, BYD Auto has signed contracts with many American companies to produce and sell different models of new energy vehicles, realizing the dream of China’s independent auto brands to enter the United States and establish themselves in the North American market. In addition, BYD’s pure electric bus obtained the Canadian Motor Vehicle Safety Standard (CMVSS) certification on April 18, 2013, which also marks BYD can official enter the Canadian automotive market.

In 2014, BYD invested US$91 million in Brazil to establish its first plant in Latin America, marking the beginning of BYD’s entry into the Latin American automotive market. It is also another NEV-related project established by BYD in foreign markets following the establishment of battery factories and electric buses in Bulgaria and the United States. In 2016 and 2017, BYD invested in and built factories in Hungary and France to produce new electric buses.

The successive completion of BYD Auto’s overseas factories shows that its overseas business distribution has been fully expanded and is developing rapidly. These factories are mainly located in Europe, the United States, and other developed countries and regions where the government and people attach importance to energy conservation and environmental protection. This is in line with BYD’s proposal when it listed on the stock market that it should prioritize new energy subsidies and high market recognition.

3.1.3 Strategic alliances

BYD’s first use of strategic alliances in the internationalization process dates back to 2008. At that time, BYD introduced Berkshire Hathaway, owned by Warren Buffett, a well-known international strategic investor, the company is BYD’s third largest shareholder, with 8.77% of the shares. With the help of Berkshire Hathaway’s shareholding, BYD’s position in the capital market has been significantly improved, and the image and popularity of the company’s products in the global market have also been greatly improved.

In 2010, BYD Auto and Daimler reached an agreement. The two parties jointly financed the establishment of Shenzhen BYD Daimler New Technology Co., Ltd., which is another typical BYD strategic alliance. The German Daimler group is a world leader in the research, development, and production of passenger cars and commercial vehicles, and has many categories, including Mercedes-Benz cars and light commercial vehicles and Daimler Financial Services.

The reason why BYD, which is in the low-end, cooperates with the high-end brand Daimler, can be seen: For Daimler, it has begun to vigorously promote the research and development of new energy projects in recent years. , and BYD is Some auto companies with new energy core technologies intend to use BYD’s technological advantages to further the development and promotion of new energy vehicles; for BYD, it can be improved by taking advantage of Daimler’s high-quality technology and advanced management experience. And to improve your comprehensive level, more importantly, you can use the advantages of the Daimler brand to enhance the popularity and recognition of the brand in the international market. The joint venture integrates technology, process,

In 2019, BYD cooperated with Toyota to establish a new energy research and development joint venture, each holding 50% of the shares. At the same time, the products designed and developed by the company will make full use of BYD’s existing electric platform technology and electrical parts supply and integrate into Toyota’s quality control and safety standards. At the same time, the pure electric vehicles developed by the joint venture can use the Toyota brand. This event itself means the speedy completion of the strategic design, especially when Tesla started a price war.

3.2 Reasons for the Internationalization of BYD

Crossing national borders to enter the global market is a strategic choice for enterprises when facing fierce market competition, the only way for enterprises to achieve further development, and an inevitable trend of world economic integration. As for BYD, entering the international market is also an unavoidable choice for BYD to seek to grow and strengthen, mainly due to the following two aspects.

3.2.1 Expand the development space and seek international markets for corporate products

One of the most direct reasons for companies to develop international operations is the opening of the international market, and BYD is no exception. The continuous intensification of business globalization has made companies around the world more and more competitive in domestic and foreign markets, and have entered the international market for faster and better development of enterprises.

By expanding foreign markets, companies can more efficiently seek more customer groups for their products and services, and expand their market share. International auto giants have achieved high revenues by grabbing shares of the auto market abroad.

3.2.2 Seek the best allocation of resources to reduce operating and production costs

Affected by factors such as the geographical environment and the level of economic development, there are huge differences in the factors of production between countries and regions. To reduce operating costs, BYD Auto constantly searches for the best resource allocation in domestic and foreign markets and various regional markets.

He Yipeng, general manager of BYD’s European branch, once explained the reasons why BYD chose to build factories in foreign countries in its international operations:

First, BYD products from foreign factories for the auto market require only a small amount of energy costs and driver costs, compared to production in China. Exporting to foreign markets saves time and effort.

Second, BYD’s excellent vertically integrated development model can be fully utilized by directly building a factory, greatly shortening product development cycles, reducing intermediate product losses, and Ultimately, you achieve cost savings.

3.3 Product Positioning of BYD international new energy vehicle development

Product positioning refers to the process in which a company establishes a specific image and status of the product in the minds of consumers through a variety of marketing methods during the process from product development and design to production. and assembly until the market launch. This article analyzes the product positioning strategy of BYD Auto’s international operation through three tracks: price positioning, function positioning, and brand positioning.

3.3.1 Process positioning

In the field of new energy vehicles, the Group continued to promote the renewal of Dynasty series models. During the year, several models were launched, including the new generation “Tang EV” from RMB 279,500 to RMB 314,800 and the new plug-in hybrid version “Song Max” from RMB 179,800 to 199,800. The new “Yuan EV” was 89,900RMB to 139,900 RMB, the new “Qin EV” was 129,900RMB to 149,800 RMB, and the iteration model “Song Pro” was 169,800RMB to 219,800 RMB. The excellent performance and appearance won unanimous praise from the market.

In 2019, “Yuan EV” and “Tang DM” ranked in the top five for new energy vehicle sales in China with a price of between RMB 230,000 and RMB 330,000 respectively. Among them, “Tang DM” sales are in the domestic new energy vehicle market with a price of more than 200,000 RMB. They stand out, further consolidating the group’s leadership position in the industry.

This year is the first year of the group’s e-series products. The group has launched e-series products for different consumer groups, continuously improving the product structure and fully covering the new energy vehicle market segment. During the year, it will successively launch “e1” from RMB 59,900 to RMB 79,900, “E2” from RMB 89,800 to RMB 119,800, and “e3” from RMB 136,300 to RMB 142,300 and other models from RMB 230,000 to RMB 380,000.

From BYD Auto’s product positioning perspective, the new energy vehicles are priced from RMB 209,800 to RMB 249,800, the E5 from RMB 229,800 to RMB 249,800, and the Qin from RMB 209,800 to RMB 309,800. E6 is from RMB 309,800 to RMB 369,800, Tang is from RMB 251,300 to RMB 518,800, the domestic price of the K9 new energy bus is more than 2 million yuan, and the foreign price is equivalent to more than 4 million yuan.

In the process of pricing different products, companies generally locate the consumer market for different products based on the price level and choose different customer groups. From the perspective of BYD Auto’s pricing options, new energy vehicles take advantage of external opportunities such as government support, market demand, and internal advantages such as advanced technologies to capture a market share in the range from 150,000 to 300,000 yuan and expand to higher price ranges.

3.3.2 Positioning of functions

There are many types of BYD new energy vehicles, different series have different functional positions and different consumer audiences.

Dynasty Series – Dynasty series models include SIN and cars, such as the Qin, Tang, Song, and Yuan (electric) models. This series of products takes the route of high-end products, positioned in the mid-range car market, and gradually extends to the high-end market. Its main customer positioning is a consumer group that pursues power, has high requirements for the multi-function car, low emission, environmental protection and energy saving, and space, and has a certain purchasing power.

E Series: E5 and E6 are two pure electric vehicles independently developed by BYD, positioning themselves in the mid-level car market. Especially the E6, which takes into account the design concepts of SUV and MPV, and has the advantages of low emissions and low noise of electric vehicles, is a crossover with good performance. The main positioning of the E series is to pursue energy-saving and comfortable home user groups and develop practical electrification solutions for the taxi industry.

In addition, the K series is a new energy bus, which is designed to provide customized solutions for the various needs of customers for urban public transportation; the C series is a new energy passenger bus that can meet multiple purposes, such as intercity passenger transportation, public business reception, and tourist passenger transportation; T series of pure electric trucks, such as commodity logistics vehicles and sanitation vehicles, can meet the needs of transportation and sanitation vehicles.

3.3.3 Brand positioning

Since the implementation of BYD Auto’s internationalization strategy, it has been mainly committed to meeting the needs of consumers for low-end and mid-range vehicles and has continued to expand into high-end new energy vehicles, setting the strategic business objectives of BYD Auto. Their own brand an “internationally renowned brands”. For many years, BYD has always implemented the development concept of “technology is king, innovation is the foundation”. With its strong scientific research and development capabilities and technological innovation capabilities, BYD has formed a core competency in the price, efficiency, cost, and technology of automotive products. force. This brand positioning and strong technical support,

The 7 + 4 strategy aims to use electricity for all places where oil is used in the road transport sector.

Strategy 542 is BYD’s blueprint for new energy vehicles in the areas of power, possibility, and fuel consumption, which are key indicators to measure vehicle standards. 5 means the acceleration of 100 kilometers is no more than 5 seconds, 4 means the full-time four-drive electric motor, and 2 means the fuel consumption of hybrid models is less than 2L. Thanks to the high standards and Realizing this strategy, BYD China’s new energy vehicle industry has risen to a world-class level.

BYD attaches great importance to the independent idea and design and the application of new energy technologies. Today, BYD has become the only automobile company in the world that can simultaneously master new energy vehicle batteries, engines, electronic control, charging infrastructure, and vehicle technology. BYD has an electronic platform with 33111 as its core technology. The two 3 represent the drive system motor, electric control, transmission 3 in 1 high voltage and DC-DC highly integrated system, charger, distributor 3 in 1, three in one represents 1 integrated instrument, air conditioning, audio, The control module PCB board, such as the smart key, an intelligent auto-rotation large screen equipped with the DILINK intelligent ecosystem, and a battery with long life and stable performance. Among them, the DILINK intelligent ecosystem is the first large-scale opening of automotive sensor systems and execution systems on a global scale. The purpose is to provide global developers with a multi-dimensional development platform to promote the accelerated development of the autonomous driving industry.

BYD believes that electrification is the first half of the automobile revolution, and the second half will be more intelligent and Internet-based, and BYD’s strategy for the second half is to open up. Its purpose is to usher in a new era of internationalization, electrification, and smart grids, and ultimately reshape the pattern of industry and the mode of human travel.

Overall, BYD’s precise positioning of the brand has expanded its track record of international operations and enabled it to continue its long-term development.

Chapter 4. Problems in the international development of BYD’s new energy vehicles

4.1 Autonomous creation capability

Compared with large international auto companies, China’s auto industry started late, coupled with a lack of relevant talents and the combined influence of domestic and international environmental factors, resulting in more homogenization of the products launched by the industry. Mainly in product design, performance, advertising, marketing, and many other aspects. In terms of product design, the design of Company B’s model has many similarities with the designs of many major brand manufacturers in terms of appearance, vehicle structure, and spatial layout, and there is no obvious difference in performance.

There are many similarities between the security settings and the products of other similar car companies. In terms of product promotion and marketing, the policies and strategies formulated by manufacturers have obvious relevance, invisibly turning away some potential customers, resulting in a decline in product market share and restricting the implementation of future strategies and market expansion.

It is understood that the international marketing department of company B does not sufficiently understand its competitors, which reduces its competitiveness in the market. Some employees of company B are also employees of other companies in the same industry because they have a good understanding of business technology and market business processes, which undoubtedly increases the advantages of competitors in the same industry.

Therefore, Company B must realize that only by upgrading corporate resources promptly can it meet the differentiated needs of large, medium, and small customers in the market, which requires companies to improve the level of refinement of the central management and product management.

4.2 Control Level

As a current advocate and pioneer of new energy vehicles, BYD has achieved good results in domestic and international markets. From the development history of Company B, it is not difficult to see that there are management problems in information processing, the use of management systems, or the construction of production technology systems, and it is necessary to improve the level of management.

First, in terms of information processing, affected by the traditional system of the automotive industry, the current process management is relatively outdated and backward. In many production links, whether it is scheduled reports, transmission, or data updates and feedback, it is mainly based on manual work. Not fully using modern information processing tools, not only consumes a lot of time but also reduces work efficiency.

In addition, due to the characteristics of the automotive industry cluster, in the process of internal production and external sales, the collaborative processing of various departments is required so that each department can exchange information, and discover and solve problems promptly. However, currently, the B company has not yet been established, this is because the information processing system is not perfect, which leads to the impossibility of updating information and data exchanges and exchanges between departments in a manner timely, which generates a lack of coordination in the production process.

Second, in the application of the management system, Company B currently mainly adopts the ERP system in the management system. Through the ERP system, it carries out the management of the modular system in the company’s finances, human resources, production operations, marketing and customer service, supply chain and logistics, etc. All departments share information with the shared library through the ERP system, and all source data only needs to be entered once in a certain management module, which not only ensures data consistency but also enables information sharing between several companies.

However, it is in actual operation. The knowledge of most frontline production shop technicians about this system is still at a very early stage. Many operators have not been systematically trained and cannot realize that the data provided by their own departments are relevant to the production and management of the entire company. The role and influence are not strong enough, and the operational competition is not high, which greatly reduces the efficiency of the management system tools and makes them unable to play their due role, which will weaken the overall advantage of the company.

Third, in the construction of the production technology system, because the whole car can be regarded as a product for the car company, many production departments are involved in the manufacturing process of the whole car, such as the production system. energy, car design, interior space, etc., in the specific production process, are produced separately. This will cause such a problem, if the technical capabilities, service capabilities, and credit ratings of each production department are uneven, then the performance and feelings of vehicles assembled from parts produced by different departments will also be different, so the quality of the vehicles that circulate in the market will make customers question themselves.

4.3 Classification regarding clients

The development of new energy vehicles has become a general trend, and BYD Company has also realized this and has actively expanded its new energy vehicle business on a global scale with remarkable results. When promoting the business on a global scale, it is first necessary to conduct a feasibility analysis of the target market and conduct comprehensive research on the target market, fully understand the needs of local customers, and formulate production plans on this basis to meet the needs of the different clients. Different requirements regarding function and quality.

However, when BYD company was marketing its products, the classification of customer groups was not clear, and the situation of providing the same products and services to groups with different needs arose. Did not fully understand individual customer needs and did not do classified marketing. This would result in Customer satisfaction being greatly reduced. It can be seen that accurate customer classification is of great benefit to product positioning and marketing, and it is extremely important to develop differentiated marketing strategies for different customers.

4.4 Reception difficulties

The company’s operating income fell slightly and its net profit fell sharply despite the reduction in policy subsidies. The most important reason is the decline in company profits. Company B’s 2019 annual report shows that the company’s annual revenue was approximately RMB 127.739 million, a decrease of 1.78% compared to the same period last year. The net profit attributable to shareholders of the listed company was 1,614 million yuan. An interannual decrease of 41.93%. Non-net profit deducted was 230 million yuan, a year-on-year decrease of 60.64%. Among them, revenue from the automotive business and related products business was about RMB 63.266 million, a decrease of 16, 76% compared to the same period last year; New energy vehicle business revenue was approximately RMB 40.145 million, a decrease of RMB 23.42 from the same period last year. %, the proportion of the group’s total revenue dropped to 31.43%.

In terms of sales volume, BYD sold a total of 461,300 vehicles in 2019, a year-on-year decrease of 11.39%. Among them, the total sales of new energy vehicles was 229,500, a year-on-year decrease of 7.39%, accounting for 49.7% of total sales.

The top three factors swallowing profits are industry and policy changes, increased research and development spending in the current period, and the impact of financial expenses. In terms of idea and design expenses, BYD invested up to 5 billion yuan in 2019, which even exceeded the net profit. Technology is the life of new energy. Of course, high-level research and development has also achieved good results. Company B has launched various models during the year, including the new generation of Tang EV, the new Song MAX plug-in hybrid version, the new Yuan EV, and the very popular new Son Qin EV, etc. The design of the new series is very fashionable, and can almost compete with international brands, thereby boosting sales. In terms of financial expenses, the company’s revenue in 2019 was 130 billion yuan, long-term loans accounted for 12% of total assets, and short-term loans repayable were nearly 70 billion yuan. . 40% of total assets accounted for half of the revenue. If Company B cannot improve its asset-liability structure, the company will be overwhelmed with short-term and long-term loans, and even become a bank job.

4.5 Unstable international environment

2020 marks the 12th anniversary of the full outbreak of the international financial crisis and is also a major turning point for major development, changes, and adjustments in the global economic structure. Several major international events will profoundly affect future development from the perspectives of technology, structure, and regulations. Long-term world economic trends and the globalization process. The tariff policies implemented by the world’s main economies, as well as the corresponding retaliatory measures by other economies, have had a greater impact on world economic growth, in the face of a complex and severe external environment and the outbreak of the new coronavirus pneumonia. If Chinese enterprises want to maintain sustained development, stability, and healthy, they must also make corresponding adjustments and strategic changes. Therefore, the complex and changing international economic situation also poses greater challenges for BYD’s development, requiring BYD to change its development strategy to better respond to the risks it will face.

This chapter mainly discusses the international development status of BYD company’s new energy vehicles, specifically sets out its overview, the current state of the industry, business advantages and expanded current business areas, and a more detailed display of the business capabilities and technology of the BYD company.

After fully understanding the various situations of the company, he pointed out that the company has weak independent innovation ability, the management level needs to be improved, and the customer classification is not accurate. He is facing a series of problems such as the unstable international economic situation and environment.

Chapter 5. The inspiration for BYD’s entry into the international market and its applicability to other companies

5.1 Constant internationalization strategies of Companies

Under the influence of factors such as the weakening macroeconomic situation and the easing of stimulus policies for new energy vehicle devices, the market for new energy vehicles showed a weak trend, and the competition was fierce. With the in-depth development of economic globalization, internationalization is an inevitable trend of new energy vehicle enterprises in China, but also a fundamental way out.

Based on the in-depth study of the opportunities and risks in the international market and complete preparations, the powerful new energy vehicle enterprises should formulate an internationalization strategy as soon as possible and open up a wider space for development.

In implementing the internationalization strategy, BYD is known for its strength and does not pursue the vigorous and short-term dynamics of M&A of foreign companies, while seeking the unification of current interests and long-term goals. On the contrary, in the past, Chinese companies hoped to open up the international market through large-scale overseas M&A with many unsuccessful cases. Therefore, new energy vehicle enterprises can learn BYD’s pragmatic management style. Without enough strength and experience, they are not eager to seek success, choose suitable markets, trade first, understand the market, establish relationships, and then according to development needs. Considering the investment, The initial inversion scale should not be too large and should gradually grow stronger as you touch the stones. Although it may slow down, the foundation is firmly established and favors long-term development.

BYD’s development is the epitome of the development of China’s thousands of enterprises. However, not all businesses can develop with great success. Nowadays, with the rapid development of information technology, multinational companies are the inevitable choice for businesses to survive. However, with science, with the development of technology, the competitive pressure on companies is also growing. The choice of a good marketing strategy has become the key to the survival of companies. BYD is the representative of many multinational companies in China, and its development model is worthy of our consideration and reference.

First, from the perspective of a strategic approach to international markets, BYD is the same as other multinational companies: it starts with exporting products and uses exports as the driving force for global operations. The international marketing of products is the market research strategy. When the right time comes to win a certain international market, and then build a factory abroad, progress can be said to be step by step, which not only reduces the risk of the company entering the international market but also seeking experience for new constructions and opening a certain market.

Second, from the perspective of overseas expansion strategy, BYD has adopted a steady expansion strategy. According to the intensity of the extension, the overseas expansion strategy of enterprises can be divided into gradual and jumping. BYD adopts a gradual overseas expansion strategy for trade. The way to enter the foreign market, thus opening up the international market, using direct and indirect exports to gradually accumulate the experience of international operations, thereby expanding the foreign market, and finally achieving the goal of occupying the international market share. According to the objective and subjective needs, we can specifically plan how to gradually advance to a higher level,

The target market selected in the first place are the developed countries and the regions with the greatest weight in the international economic arena, and these developed countries or, in general, the region will have strong competitiveness in the international market. After gaining brand status in a highly competitive market, it will enter the vast market of developing countries with great height and development, and establish a high-quality reputation for BYD products. Seeing that the export of products to third-world countries can make the brand quickly earn foreign exchange and occupy a large share of the market in developing countries, however, if it develops in the long term, it is not conducive to establishing an image of a high-quality brand of BYD products.

From BYD’s globalization development strategy, we can see that if an enterprise wants to achieve a leading position in the international market, it must first improve its core competitiveness, as this is the key to winning the enterprise in the international market and Choosing the right marketing channel, this factor is very important for the development of the company. A good marketing channel can effectively reduce the cost to the company and make a non-inconsiderable contribution to the long-term development of the company. BYD is successful, but it does not mean that BYD’s model must be correct for other companies, so it is unacceptable to copy BYD’s model to develop its own competitiveness. It is the best for you. Development should not look for the New World on the map of others,

5.2 Selection of International Companies as Overtaking Target. brand promotion

Comparison and perfection are important management methods to improve the competitiveness of companies. It refers to the continuous search and investigation of best practices in the best companies in the industry and uses it as a benchmark to compare with the company in multiple dimensions, analyze the gaps and learn the advanced experience. It has entered a virtuous circle of continuous improvement in the management of companies and surpasses first-class companies.

Home appliance companies interested in pursuing internationalization can implement selective internationalization and benchmarking management, ideas and design, manufacturing, brand development, marketing, and services in a global context. Benchmarks, such as BYD, Tesla, etc., compare the status of enterprises, find gaps, continue to improve, and promote the rapid and healthy development of enterprises. At the same time, we will actively establish cooperation with international advanced home appliance companies, learn about their business philosophy, management methods, and advanced technologies from a close distance, and achieve a win-win situation of cooperation.

The true internationalization is the internationalization of the brand. The new energy vehicle company must first position the brand accurately. Brand positioning generally includes high quality, high price, medium price, low quality, and low price. Companies can learn from BYD and occupy the mid-range market first with high-quality and mid-price positioning. Quality products and services are gradually becoming high-end products and continue to enhance the brand value.

After a clear positioning, how to increase brand awareness requires efforts in brand promotion. Businesses need to build their own brands prominently. They can promote their brands through advertising, sponsorship, and exhibition. In the branding process, it is necessary to make full use of supporting policies and funds from governments at all levels for building internationally recognized brands, actively declaring, and obtaining external support.

5.3 Importance is given to technological innovation and the manufacture of world-class products. Utilize and integrate global resources

Core technology based on original innovation with independent intellectual property rights is the core of the competitiveness of enterprises. Technological innovation is an essential element of the globalization of new energy vehicle companies, and it is also a prerequisite for manufacturing world-class products.

Companies should continue to increase investment in ideas and designs, increase the number of staff, improve the organizational structure and operating system, establish the idea and design centers in major markets or places where talent gathers, and use and integrate global resources. to search for core technologies and “explosive model” products.

At present, new technologies such as intelligence, the Internet, energy saving, and environmental protection promote the transformation of new energy vehicle consumption patterns with an unprecedented breadth and depth. Companies must strengthen research and development, use these technologies and actively adapt to trends. At the same time, we should improve the consumer experience and develop new products that consumers love, which are easy to operate and have stable quality.

An international company must be able to use and configure all kinds of resources on a global scale. Managers must have international thinking, use global resources in ideas and design, purchasing, production, sales, etc., organize related activities at the lowest cost, and take into account the political environment.

The countries and regions with the best and most effective results will make the company’s supply chain develop into a chain network facing the global market for resource supply and product sales.

For the most important resource talents, companies need to introduce international talents, hire local managers, idea and design personnel, marketing personnel, and after-sales service personnel, build a management team, and even integrate small companies with technology globally. using their talents, patents, and technology for the company’s use.

At the same time, we will strengthen international exchanges and cooperation, maintain close ties with companies in the same industry, and actively seek cooperation with internationally renowned companies in property rights, technology, and markets.

5.4 Implement location management

The illustration of BYD Group’s internationalization process is based on the fact that it must truly integrate into the local area to become a localized enterprise, properly make overseas investments, establish local branches, offices, factories, idea and design centers, and other resident agencies to establish production, marketing, service network, and conscientiously comply with local regulations, actively participate in public welfare, environmental protection, and other social initiatives, comply with corporate social responsibility and establish a good public image.

At the same time, overseas organizations should achieve localization in terms of staff composition, improve cross-cultural management capabilities, and create a corporate culture that overseas employees are happy to accept. Only the location of operations can convey information about the company’s long-term development in the local area, giving partners, distributors, and consumers confidence, so that the company can expand its own brand and achieve long-term development.

Achieve the local development strategy, there are several advantages: First, the localization of design, the use of local talents, and the development of new energy vehicles that conform to the characteristics of local consumption. To achieve localized design and production, the company adheres to the development philosophy of technology as king and innovation as the foundation.

Velocity captures market information and makes product design keep up with market changes.

Second, marketing, so that the propaganda can better understand the psychology, lifestyle, and consumption concept of local people. For example, BYD’s slogan in the United States is Build Your Dreams. The route to create and expand famous brands starts by first entering developed countries to establish credibility, build brands, and then quickly occupy the markets of developing countries and adhere to the diversification of international market design.

Third, the location of production, the construction of factories in the United States, using production resources, labor, the reduction of tariffs, and transportation costs. At the same time, you can avoid technical barriers that may arise in the future, reducing the so-called “entry” costs, which makes BYD in the United States. The product structure of the market will be more streamlined.

Throughout BYD’s march into the global market, BYD can use the strategy of “first, hard, and easy” when entering the global market. First, enter the developed countries and the regions with the greatest weight in the international economic arena, such as Europe and the United States. BYD has moved forward to meet the requirements of local consumers, creating local brands, and demonstrating its differentiated marketing strategy to enter the world, more effective absorption of consumers through more targeted marketing strategies, taking on more markets. Under the guidance of an effective global market strategy, BYD has established 29 manufacturing plants, there are branches or offices in the United States, Europe, Japan, Hong Kong, Taiwan, and other countries and regions, and more than 220,000 employees worldwide. world.

BYD’s successful strategy does not mean that all companies are suitable for this strategy. The success of BYD’s entry into the global market is that it has had several advantages before. For example, because it has mastered the core technology of electric batteries, which is the most important link for new energy vehicles, and has ripe conditions for mass production, the company has always been the sales champion of the vehicles. new energy from China. BYD has a large-scale economic advantage and can enter the international market; technology is leading.

The first company to pass this certification laid the foundation for internationalization: brand effect and quality is the life of the company. BYD adheres to high-quality management standards and has become synonymous with “high quality”. Although BYD is in a leading position, it wants to further expand its market share. It is very difficult to go to the international market and get out of China to create a global brand.

BYD’s success may not be replicated, but it has profound implications for other companies. When companies enter the global market, they must first correctly understand their own strengths and develop conditions. According to their own development and product characteristics, they will be different according to local conditions.

First, determine the competitiveness of your products in the industry and each region’s competitiveness and development potential, and develop strategies based on the attributes of your products to determine whether they meet the so-called “three-in-one” local strategy. It may be suitable for domestic production and design marketing in foreign countries, or you may only need to establish an information platform or marketing point abroad; When the international market continues to expand, it is necessary to determine whether the product complies with local popular culture and religious beliefs.

The second is to set up factories abroad, especially in developed countries. Labor costs and rents tend to be higher than domestic ones, and they no longer have the comparative advantages of low labor costs in domestic production, and the production costs of products will also rise.

In the initial stage of external expansion, the products were mainly exported to foreign countries for marketing. A large number of products were exported to countries and sold in foreign markets. After gaining local market recognition, for example, BYD invested in the USA in 1999, now the company owns factories, product design centers, idea, and design centers, training centers, and after-sales service centers in Neckar, The Angels.

The company has gradually formed a complete set of ideas and design, production, and sales systems, achieving localization. Today, the BYD brand is already famous all over the world. Its new energy vehicle products have already penetrated 300 cities and are also leaders in the same industry. Its success has brought a lot of inspiration to many companies in China.

5.5 Strengthen the company’s skills

For a long time, the quality of BYD products has always been reliable and has laid a solid foundation for the creation of famous brands. Before a brand can go international, it must be backed by a strong national base. BYD also acknowledges this point. Before going international, it fully developed the production sales chain and established the brand earlier in China.

5.6 Choosing Markets in developed countries

At the beginning of BYD’s internationalization, it is preferred to enter the market of developed countries in the United States. This strategy is different from most companies. Many companies generally choose underdeveloped countries such as Africa and Southeast Asia in the early stage of international development, which can reduce costs and relatively weak competition. You can avoid many obstacles to trade barriers.

However, BYD believes that it is easier to enter the markets of developed countries such as the United States. Once you’re on your heels, it’s easier to break into developing country markets. If you enter the markets of underdeveloped countries first, even if the benefits are realized, it will take a lot of time and effort to enter the market of developed countries, so BYD has chosen the hard and easy first approach, with the established brand effect in developed countries.

5.7 Meeting consumer needs early

For a company’s products to be favored by consumers, it must be that the product can satisfy the needs of consumers under the premise of guaranteeing the quality of the product. BYD also recognizes this problem, so the company has passed a series of autonomy abroad. Expansion and mergers and acquisitions allow design, research, production, and marketing to be closely integrated with the needs of local consumers, and to deeply understand the local market and produce differentiated products that meet consumer needs. This has differentiated itself from the mainstream products in the local market and at the same time meets the needs of consumers and has quality assurance.

conclusions

In short, BYD’s internationalization has demonstrated the role and paradigm of Chinese new energy vehicle companies going global. In 10 to 20 years they will be an important strategic opportunity for China’s new energy vehicle companies to start the process of internationalization. We believe that as long as independent brands, technological innovations, quality gains, and quality services adhere, more Chinese NEV enterprises will surely start the internationalization journey and build more world-renowned brands.

Summary

In recent decades, the globalization of the automotive industry is increasingly evident. Making full use of domestic and international markets to continuously promote the export of China’s auto industry has become the only way that China’s auto industry can expand its industry through independent brands. Also, the sector’s oil consumption transport has grown at a faster rate than in any other sector. Transportation accounts for one-fourth of greenhouse gas emissions. To solve these problems, for the automotive industry, optimizing the energy structure and reducing dependence on non-renewable resources such as oil is the development direction of the contemporary automotive industry. In this context,

BYD, once the world’s second-largest rechargeable battery manufacturer, has entered the automotive production and sales industry with its advantages in battery production. Because you have mastered the core technology of electric batteries, this is the most important link for new energy vehicles. And with the conditions ripe for mass production, this has laid the foundation for the technological reserve of BYD’s new energy vehicle internationalization process, and has also made BYD a leader in the global new energy field and in a leader in the global rechargeable battery industry. Since its establishment, BYD Auto has always adhered to the concept of developing its own brand as a guide, aiming to “build a world-class national automobile brand” and revitalize the independent auto industry as its own responsibility. It is constantly on the path of international operation in a unique way. to explore. The Group adheres to the development philosophy of “technology, quality and responsibility”, assumes corporate social responsibility for ecological and environmental protection, and creates a long-term sustainable core competitive advantage in the new energy automobile industry.

This article uses BYD’s new energy vehicles as a case study to present the international development status and development experience of BYD’s new energy vehicles. Second, BYD’s new energy vehicle internationalization strategy is presented from the international market entry mode, international motivation, and brand positioning. In-depth analysis. Chinese companies in the conditions of world economic integration and an open economy face the situation of “internationalization of the international market and internationalization of domestic competition.” To integrate into the international market and also to revitalize the national industry, BYD proposed the path of going towards
international business management.

BYD’s international business strategy is based on the central objective of creating an international brand. When the BYD brand has a certain reputation, credibility, and reputation, it has proposed a global brand strategy. After using the empirical analysis method to refine and summarize the successful experiences and lessons learned from BYD’s internationalization strategy, he presents suggestions for Chinese companies to formulate a suitable internationalization strategy.

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