In the first quarter of this year, when the market sales of most mainstream car companies have declined, BYD relied on the huge advantages of the new energy vehicle market to show a contrarian upward performance.
According to the data released by the Association, BYD sold a total of 287363 vehicles in the first quarter of this year, up 182.8% year-on-year.
But does selling more mean making more?
Looking closely at the financial report data released by other car companies, the degree of sales growth seems to be in direct proportion to profits. In 2021, Volkswagen's total sales fell by 8%, but profits rose by 99%; a group of new forces sold more and lost more.
After analysis, Brother Reel found that the reason for this phenomenon is mainly related to the sales structure and input of enterprises. Although Volkswagen's total sales have declined, the brand has focused its development on the mid-to-high-end sector in previous years, and the average single model generates more profit than in previous years. The new car-making forces are still in the initial stage of development, and the investment in research and development costs is very high, and it may take a while to obtain high profits.
Look back at BYD. According to official sales data, BYD sold more than 286,000 new vehicles in the first quarter, up 423.0% year-on-year, of which hybrid models accounted for 49% of total sales.
In terms of models, the monthly sales of the Qin family and the Song family remained above 20,000 vehicles, while the monthly sales of Tang, Han and Dolphin were stable at about 10,000 vehicles. From the price point of view, only Tang and Han are the main high-end market among the hot-selling models, while other models seem to be more close to the people. So, how much does BYD earn?
Net profit soared and gross margin declined
According to the financial report data, BYD's operating income in the first quarter of this year was 66.825 billion yuan, an increase of 63.02% year-on-year, and the net profit attributable to shareholders of listed companies was 808 million yuan, an increase of 240.59% year-on-year, but the gross profit margin was 12.40%, lower than 12.59% in the first quarter of last year, ushering in a new low in five quarters.
In the view of Brother Yuan, the substantial increase in net profit is related to the rise in sales and strong cost control, and the role of the latter is more obvious.
It should be known that BYD's current hot models basically began to be listed in the second quarter of last year, and the Qin PLUS DM-i, which was listed in March 2021, although it obtained higher market heat after listing, its peak state was still in the second quarter. In other words, the base of the first quarter of previous years was relatively low, which caused the illusion of a sudden surge in BYD's sales, and it is not known that BYD's main focus is in the last three quarters of last year.
In the first quarter of this year, BYD vigorously controlled costs at the front end and back end of the industrial chain. The supply chain of automobiles is very long, car companies want to produce a car, must rely on the supply of other parts and components companies, due to chip shortages and supply chain instability and other reasons, the output of many car companies fell sharply. As an enterprise with multiple sectors, BYD's industrial chain incubation ability is very strong, and key components such as chips can be developed and produced by themselves, thereby reducing procurement costs.
It is worth noting that BYD canceled the fuel vehicle sector in March. Objectively speaking, BYD's market share in the fuel vehicle market is not high, and after the cancellation of the fuel vehicle sector, it can put resources in the new energy field with higher sales. The substantial adjustment of resources will be more invested in the initial stage, but in the long run, the advantages outweigh the disadvantages.
In addition, BYD has raised prices twice this year for some of its products. Due to the impact of the decline in new energy subsidies, BYD announced on January 21 that some models would increase their prices by 1,000-7,000 yuan. Due to the rise in raw material prices, BYD raised the price of some models by 3,000-6,000 yuan on March 16.
There is no doubt that netizens are still more critical of the price increase, but this is not the case from the perspective of potential consumers. Price increases are a common phenomenon, and consumer demand for car purchases has not changed much from the usual, when you have to choose a product from many companies, or rely on the brand influence and high quality of these two factors to consider. By spreading the cost pressure evenly on consumers, bydir's profit margins for bicycles are guaranteed.
But then again, BYD's gross margin is really not brilliant enough. Brother Reed believes that in addition to the rise in raw materials, the main reason for this result is the high cost required for the release of the new car, and it should be known that BYD launched a total of BYD Yuan PLUS, the new Song MAX DM-i, and destroyer 05 in the first quarter of this year, and also prepared for the promotion of the new BYD Han family listed in early April.
Selling 1.5 million units this year? Where does the confidence come from
On February 11 this year, BYD released this year's development goal: to serve 3 million new energy vehicle users. By 2021, BYD has won the trust of 1.5 million consumers, in other words, BYD plans to sell 1.5 million new energy vehicles this year. Adding to its cumulative sales in the first quarter of this year, BYD sold 1.2 million units in the last three quarters of this year.
In order to achieve this goal, BYD will launch 20 new energy products this year, including the Dynasty series, Ocean Network, high-end brands and Denza four sectors. Among them, BYD's high-end brand is expected to be released at the Beijing Auto Show, and its products are expected to focus on the high-end hardcore off-road market, with a price of more than 500,000 yuan. The Seals, Sea Lions, Cruisers and other models of the Ocean Network series have information revealed that they are expected to be listed in the second and fourth quarters of this year.
In the environment of good new energy development momentum, BYD firmly grasps the right to speak in the field of new energy, and has made a good job of planning for new cars this year, and naturally has the confidence to complete the sales target of 1.5 million new cars. Of course, there are more and more competitors in the new energy market, in addition to independent brands, Toyota, Honda also have products to join the new energy market, BYD is still not able to take it lightly.