On the evening of April 3, BYD Automobile officially announced that it will stop production of fuel vehicles from March 2022 and will focus on pure electric and plug-in hybrid vehicles in the future. After all, BYD is the world's first official announcement of the suspension of fuel vehicles car company, the first is always easy to be remembered, the information came out, netizens instantly did not calm down, directly put this news on the social platform hot search list of the first position.
In fact, fuel vehicles have long been not the core business of BYD Automobile. Speaking of BYD, many netizens said that they did not know that BYD was still producing fuel vehicles; some netizens also said that they could not call out the model names of several fuel vehicles in the first time. So why did BYD "suddenly" officially announce the suspension of fuel vehicles?
1. The "sense of presence" of fuel vehicles is low
According to the data, BYD's annual sales of new energy vehicles in 2021 603783 (new energy passenger cars are 593745 units), an increase of 231.6% year-on-year, while the sales of fuel vehicles 136348 units, down 42.54% year-on-year, and fuel vehicles account for 22.58%. By the first quarter of this year, BYD's cumulative sales of new energy passenger cars were 286329, while the sales of fuel vehicles (passenger cars) were only 5049, accounting for only 1.7% of fuel vehicles, that is, for every 100 passenger cars sold by BYD, fuel vehicles sold less than 2.
2. The decline in profit margins accelerates the brand turn
More importantly, in BYD's 2021 financial report released on the evening of March 29, the current operating income reached 2161.4 yuan, up 38% year-on-year; the net profit attributable to the shareholders of the listed company was 3.045 billion yuan, down 28.08% year-on-year; and the net profit after deducting non-recurring gains and losses fell by 57.53% year-on-year to 1.255 billion yuan.
The automotive business contributed 52% of BYD's revenue, up nearly 34% year-on-year to 112.49 billion yuan, but the gross profit margin of automobiles and related products was 17.39%, down 7.81 percentage points year-on-year. BYD's overall gross profit margin was 13.03%, down 6.36 percentage points year-on-year, and the gross profit margin hit a new low in nearly 14 years.
Why do sales go up and profits go down? BYD explained the decline in net profit, partly because BYD's epidemic prevention product business contracted rapidly as the epidemic was effectively controlled; on the other hand, due to the soaring prices of raw materials, BYD encountered unprecedented cost pressure.
On the other hand, it is due to the decline in sales of the han and Tang series models with higher prices.
Bydie's average bicycle price of new energy passenger vehicles in 2020 was 156,000 yuan, and the average price of bicycles in 2021 fell by 8.26% year-on-year to 143,000 yuan. The reason is that in the sales volume in 2020, BYD Han, which is priced at more than 200,000 yuan, accounts for 21.38%, and the cumulative sales volume in the five months of listing exceeded 40,000 units, making the profit of bicycles rise. In 2021, the sales of the Qin and Song series priced at about 100,000 yuan soared, accounting for 54.12%, while the sales of the Han and Tang series with higher pricing declined, accounting for 16.12% and 7.4% respectively.
The decline in bicycle profits has accelerated BYD's shift to high-end to a certain extent.
It is understood that Denza Automobile Sales Service Company was formally established in February this year, BYD's organizational structure was adjusted accordingly, and the Denza Sales Division was established, and Zhao Changjiang, former director of BYD's high-end brand preparation office, was transferred to the general manager of Denza's sales division.
According to the plan, the price of Denza models is positioned between 300,000 and 500,000 yuan, and three electric vehicles will be launched this year and next year, including MPV and SUVs. On April 1, Zhao Changjiang announced the trailer for Denza's high-end MPV, and said that "Denza's high-end MPV is about to shake the world".
It is worth noting that BYD's new high-end brand is also in preparation, after BYD brand and public relations business department general manager Li Yunfei revealed that the high-end brand model price range is expected to be more than 500,000-1 million yuan, the first model is a hardcore off-road vehicle, will be released in the second half of this year, officially listed in 2023.
For the new high-end brand, BYD insiders previously revealed, "Because it is a high-end brand, we will take out the most ferocious sharks and crocodiles in the technical fish pond and shock everyone's eyeballs." ”
3. Capacity needs
The new brand needs the support of production capacity, not to mention that the current production capacity is no longer able to meet the substantial increase in order volume.
At present, BYD's cumulative undelivered orders have reached 400,000 units, and are still increasing month by month, with the longest waiting time for pick-up reaching 454 days, which mainly comes from DM-i models.
Among them, Qin PLUS DM-i currently has 60 people waiting, the longest waiting time is 423 days; Song PLUS DM-i currently has 258 people waiting, the longest waiting time is 396 days; and Tang DM-i has 366 people waiting, and the longest waiting time has reached 454 days. As early as May last year, BYD apologized to consumers for the long waiting period for DM-i models, but due to the large order volume, the booking cycle did not decrease but increased.
In November last year, Wang Chuanfu said that due to the excessive order volume, the delivery period of dm-i hybrid models has been repeatedly extended, with a delivery period of up to 4 months and an order of up to 200,000 yuan on hand.
In terms of production capacity, as of January 2022, BYD has put into operation a total of four production bases, namely the Shenzhen plant, the Xi'an Phase I/II plant, the Changsha plant and the Changzhou plant. According to the website of the Shaanxi Provincial People's Government, the planned annual production capacity of the first and second phases of BYD's Xi'an production base is 300,000 vehicles, the conventional monthly production capacity is 50,000 vehicles, and the limit production capacity can reach about 60,000 vehicles.
In fact, in the past year, BYD has spent a lot of money on expanding production capacity. According to the financial report, in 2021, bydir's battery and photovoltaic business capital expenditure was 23.9 billion yuan, and the capital expenditure of the automobile business was 22 billion yuan, and the expenditure of the two was 36.8 billion yuan more than in 2020. In addition, BYD's construction projects in 2021 were 20.277 billion yuan, an increase of more than three times from 6.112 billion yuan in 2020.
In 2021, BYD's vehicle project has added production bases such as Changzhou, Hefei, and Fuzhou, Jiangxi, and the battery business has added bases such as Yancheng, Anhui Wuwei, and Jinan, Shandong.
According to the existing production capacity scale, BYD's actual production capacity in 2021 can reach 900,000 vehicles, but if it wants to achieve the target of 1.5 million to 2 million vehicles this year, it will complete at least 600,000 vehicle production capacity expansion targets this year, and it will also have to convert all the previous fuel vehicle production capacity into new energy vehicles.
According to BYD's plan, starting from May this year, a number of automobile production bases including Changzhou, Hefei and Changsha will be put into production, and Fordy Battery is also expanding production in many places. If production goes well, BYD's overall production capacity will increase to 2.2 million units this year and 3.6 million units in 2023.
Written in the end: in the context of the "double carbon" economy, the transformation of car companies to comprehensive new energy is sooner or later, and it is better to play the transformation than to transform early. BYD's first official announcement of the suspension of fuel vehicles is mainly due to the largeR&D investment in hybrids, blade batteries, pure electric platforms, etc., and correspondingly also obtained good market feedback; on the other hand, because the comprehensive profit of new energy models (including subsidies, points and other factors) is higher than that of fuel vehicles, thus bringing greater benefits.